Investigating the implications of technological innovations, financial inclusion, and renewable energy in diminishing ecological footprints levels in emerging economies

Abstract

The correlation between technological innovation, economic growth, renewable energy, and ecological footprint carries significant policy implications for environmental sustainability. Furthermore, financial inclusion can drastically affect the technology-climate nexus across different countries and its moderating impacts have received sufficient attention. To do this, this study examined how technological innovation, financial inclusion, economic growth, and renewable energy affected emerging economies' ecological footprint from 1990 to 2019. Additionally, this study also scrutinizes the moderating role of financial inclusion with other regressors on ecological footprint. To account for structural shifts, disguised cointegration, and numerous breaks in panel regression, this study applies advanced panel estimation methods for empirical analysis. The estimated outcomes exhibit that the influence of technical innovation, climate technologies, and renewable energy significantly reduces the ecological footprint levels. Besides, economic growth and financial inclusion significantly increase the ecological footprint levels in the emerging economies. Furthermore, the integration of innovative technology and renewable energy in emerging countries mitigates the adverse effects of financial inclusion by making it easier for creative technologies and reducing ecological footprints. These results show that emerging countries' innovative technology and renewable energy sources should be integrated with financial inclusion to enable long-term mitigation of environmental damages and sustainable growth. Based on these estimated findings, the research recommends that emerging economies should hasten technological innovations along with stronger financial development to curtail ecological concerns without hindering the pace of sustainable economic growth.