Digital finance and sustainable development: Evidence from developing nations.

Area of Science:

• Environmental Science
• Economics

Background:

• Developing economies face challenges in balancing economic growth with environmental sustainability.
• The role of digital finance in achieving environmental goals is an emerging area of research.

Purpose of the Study:

• To investigate the impact of digital finance on CO2 emissions in 52 developing economies.
• To determine if digital finance contributes to environmental sustainability by reducing carbon emissions.

Main Methods:

• Quantitative analysis using the instrumental variable generalized methods of moment (IV-GMM) approach.
• Employed diverse financial development measures to ensure robustness of findings.

Main Results:

• An inverted U-shaped relationship was observed between digital finance and CO2 emissions, indicating a time lag for positive effects.
• Confirmed the Environmental Kuznets Curve and significant influences of renewable energy, trade, financial development, urbanization, and population on CO2 emissions.

Conclusions:

• Digital finance's environmental benefits may require time to manifest.
• Simultaneous implementation of renewable energy policies and integrated digital finance with financial development strategies is recommended for enhanced environmental sustainability.