The role of Fintech in containing the carbon curse of natural resources: Evidence from resource-rich countries

Abstract

Nations with abundant supplies of natural resources are hypothesized to have high annual carbon discharge levels. Hence, these countries can be assumed to face a carbon curse that stems from the consumption of natural resources. On that note, identifying the potential de-cursing mechanisms becomes a critical important task for these countries. Therefore, this study explores how natural resource dependency, Fintech development, renewable energy consumption, international trade, and institutional quality improvement affect per capita carbon dioxide emissions in leading natural resource-abundant nations. Considering data from 2013 to 2020 and employing cross-sectional dependency and slope heterogeneity robust panel estimation techniques, the results statistically verify the hypothesis regarding the carbon curse of natural resource. Besides, Fintech development is found to directly reduce carbon emissions while also indirectly curbing emissions by moderating the natural resource dependency-carbon emissions nexus. Hence, these findings indicate that scaling Fintech credit provisions is relevant for de-cursing the carbon curse of natural resources. In addition, the findings certify that more openness to international trade boosts per capita carbon emissions while corruption control-led improvement in institutional quality plunges emission levels in the long run. However, the renewable energy consumption-carbon emission nexus is observed to be statistically inconclusive. Therefore, to elude the carbon curse of natural resources, the governments in the concerned natural resource-rich nations should amplify operational efficiency within their respective natural resource sectors, scale Fintech development-financing provisions, undergo the renewable energy transition at full swing, green the conventional trade globalization modes, and make institutions corruption-free.