Assessing financial inclusion co-movement with low-carbon development index: implications for regional development

This study assesses the relationship between financial inclusion and low-carbon development and its implications for regional development. Data envelopment analysis (DEA) is used to analyse data from a sample of E7 countries from 2001 to 2020. Results show that financial inclusion and low-carbon development are significantly related, indicating that financial inclusion is a significant driver of low-carbon development. Additionally, regional differences between E7 countries in financial inclusion and low-carbon development are identified, highlighting the need for region-specific policies to promote sustainable development. Moreover, findings show that deposits, bank accounts, and ATMs of all E7 economies contribute to environmental and economic growth inputs. The findings have important implications. Therefore, encouraging low-carbon growth via increased financial inclusion may be successful. Access to financial services, financial literacy, and financial innovation are all areas where policymakers might do more to advance the cause of financial inclusion. Accounting for variations in financial inclusion and low-carbon development between regions is important when crafting policies to encourage sustainable development. The economic climate, cultural norms, and institutional structures of a given area must all be considered by policymakers if they are to craft plans that will be successful.