Investigating the relationships among green technologies, financial development and ecological footprint levels in Algeria: Evidence from a novel Fourier ARDL approach

Abstract

Many recent initiatives have been introduced to enhance ecological sustainability by minimizing countries' ecological footprints (EF). The focus has been on achieving environmental footprint neutrality through the application of green technologies (GT) and financial development (FD) in facilitating this transition. To determine the contribution of these variables to sustainability, this study investigated the effects of GT and FD on EF in Algeria from Q1/1990 to Q4/2021. Additionally, this research examines the moderating role of GT with FD on EF. To achieve these objectives, advanced Fourier autoregressive distributed lag techniques and the Fourier causality test were employed. The findings reveal that FD increases EF, leading to ecological degradation. Conversely, GT reduces EF in the long run, demonstrating its potential to foster ecological sustainability. Notably, the study highlights the significant moderating role of GT in the FD-EF relationship. This underscores the critical role of environmental technologies in mitigating the adverse effects of FD by facilitating creative technologies and lowering EF. Therefore, the study recommends that Algeria integrates GT with FD to achieve long-term reduction of environmental harm. In conclusion, Algeria needs to hasten GT in combination with stronger FD to mitigate ecological impacts without compromising sustainable economic growth.