Investigating the biodiversity conservation capability of technological innovation and FinTech

Area of Science:

• Environmental Science
• Ecological Economics
• Development Studies

Background:

• Global biodiversity is threatened by human activities, notably economic growth and technological advancement.
• Developing countries face unique challenges in balancing economic development with biodiversity preservation.

Purpose of the Study:

• To investigate the impact of economic growth, renewable energy, technological innovation, natural resources, and financial technology (FinTech) on biodiversity in 87 developing countries.
• To analyze the complex relationship between economic development and biodiversity conservation using a novel FinTech index.

Main Methods:

• Utilized 22-year panel data from 87 developing countries.
• Employed Panel Autoregressive Distributive Lagged with Pooled Mean Group specifications and Driscoll and Kraay standard errors to address cross-sectional dependency.
• Developed a novel cross-sectional heterogeneous factor analysis-based financial technology index.

Main Results:

• Gross Domestic Product (GDP) exhibited an inverted U-shaped effect on biodiversity.
• Economic growth, renewable energy consumption, and FinTech were found to enhance biodiversity conservation.
• Technological innovation and unregulated resource exploitation traditionally threaten biodiversity, but FinTech offers potential for positive impact.

Conclusions:

• FinTech, renewable energy, and responsible economic growth are key drivers for reversing biodiversity loss.
• FinTech can foster sustainable behaviors and redirect investments towards biodiversity-friendly initiatives.
• Policy implications focus on leveraging FinTech and renewable energy for effective biodiversity conservation strategies.