The Financial Inclusion-Environmental Quality Nexus: Do Information and Communication Technologies Make a Difference?
Abstract
Environmental degradation occurs during the initial phase of development. However, after a turning point, the benefits of economic growth supported by the accelerated development of information and communication technology (ICT) can be used for environmental conservation. This research examines the relationship between financial inclusion, ICT, and environmental quality, including the development of ICT in influencing the relationship between financial inclusion and environmental quality. To obtain the research objectives, we used secondary data for the period 2010 to 2021 from 34 provinces in Indonesia using the panel data regression method. This finding is robust for different measures of the financial inclusion index constructed by a modified estimation model. The insights to financial inclusion and emission can be a reference for regulations that financial inclusion and ICT can be used as mitigation measures for environmental quality. Therefore, policymakers should consider the synergistic effect of financial inclusion and ICT in designing development and climate change policies.
References
Agliardi, E., Alexopoulos, T., & Cech, C. (2019). On the relationship between GHGs and global temperature anomalies: Multi-level rolling analysis and copula calibration. Environmental and Resource Economics, 72, 109-133. https://doi.org/10.1007/s10640-018-0259-3
Ahmadi, Y. (2015). Objective cultural capital and environmental behaviors (Case study: Sanandaj City). International Letters of Social and Humanistic Sciences, 56, 138-144. https://doi.org/10.18052/www.scipress.com/ILSHS.56.138
Asongu, S. A., le Roux, S., & Biekpe, N. (2017). Environmental degradation, ICT and inclusive development in Sub-Saharan Africa. Energy Policy, 111, 353-361. https://doi.org/10.1016/j.enpol.2017.09.049
Asongu, S. A., le Roux, S., & Biekpe, N. (2018). Enhancing ICT for environmental sustainability in sub-Saharan Africa. Technological Forecasting and Social Change, 127, 209-216. https://doi.org/10.1016/j.techfore.2017.09.022
Atsu, F., Adams, S., & Adjei, J. (2021). ICT, energy consumption, financial development, and environmental degradation in South Africa. Heliyon, 7(7), e07328. https://doi.org/10.1016/j.heliyon.2021.e07328
Bappenas, K. P. P. N. (2021). Peta jalan SDGs Indonesia menuju 2030. Kementerian Perencanaan Pembangunan Nasional / Badan Perencanaan Pembangunan Nasional. https://sdgs.bappenas.go.id/wp-content/uploads/2021/02/Roadmap_Bahasa-Indonesia_File-Upload.pdf
Caniëls, M. C. J., & Romijn, H. A. (2008). Strategic niche management: Towards a policy tool for sustainable development. Technology Analysis and Strategic Management, 20(2), 245-266. https://doi.org/10.1080/09537320701711264
Ciocoiu, C. N. (2011). Integrating digital economy and green economy: Opportunities for sustainable development. Theoretical and Empirical Researches in Urban Management, 6(1), 33-43.
Dar, S. S., & Sahu, S. (2022). The effect of language on financial inclusion. Economic Modelling, 106, 105693. https://doi.org/10.1016/j.econmod.2021.105693
Diniz, E., Birochi, R., & Pozzebon, M. (2012). Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon County. Electronic Commerce Research and Applications, 11(5), 484-494. https://doi.org/10.1016/j.elerap.2011.07.006
Dong, F., & Liu, Y. (2020). Policy evolution and effect evaluation of new-energy vehicle industry in China. Resources Policy, 67, 101655. https://doi.org/10.1016/j.resourpol.2020.101655
Dong, J., Dou, Y., Jiang, Q., & Zhao, J. (2022). Can financial inclusion facilitate carbon neutrality in China? The role of energy efficiency. Energy, 251, 123922. https://doi.org/10.1016/j.energy.2022.123922
Erlando, A., Riyanto, F. D., & Masakazu, S. (2020). Financial inclusion, economic growth, and poverty alleviation: Evidence from eastern Indonesia. Heliyon, 6(10), e05235. https://doi.org/10.1016/j.heliyon.2020.e05235
GPFI. (n.d.). About GPFI. Global Partnership for Financial Inclusion. Retrieved January 9, 2022, from https://www.gpfi.org/about-gpfi
Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 111, 84-96. https://doi.org/10.1016/j.worlddev.2018.06.020
Guo, Y., Wang, L. F., & Chen, Y. (2020). Green entrepreneurial orientation and green innovation: The mediating effect of supply chain learning. SAGE Open, 10(1), 1-13. https://doi.org/10.1177/2158244019898798
Haini, H. (2021). Examining the impact of ICT, human capital and carbon emissions: Evidence from the ASEAN economies. International Economics, 166, 116-125. https://doi.org/10.1016/j.inteco.2021.03.003
Haseeb, A., Xia, E., Saud, S., Ahmad, A., & Khurshid, H. (2019). Does information and communication technologies improve environmental quality in the era of globalization? An empirical analysis. Environmental Science and Pollution Research, 26(9), 8594-8608. https://doi.org/10.1007/s11356-019-04296-x
Khan, M., & Ozturk, I. (2021). Examining the direct and indirect effects of financial development on CO2 emissions for 88 developing countries. Journal of Environmental Management, 293, 112812. https://doi.org/10.1016/j.jenvman.2021.112812
Khezri, M., Karimi, M. S., Khan, Y. A., & Abbas, S. Z. (2021). The spillover of financial development on CO2 emission: A spatial econometric analysis of Asia-Pacific countries. Renewable and Sustainable Energy Reviews, 145, 111110. https://doi.org/10.1016/j.rser.2021.111110
Kim, D. W., Yu, J. S., & Hassan, M. K. (2018). Financial inclusion and economic growth in OIC countries. Research in International Business and Finance, 43, 1-14. https://doi.org/10.1016/j.ribaf.2017.07.178
Kim, S. (2021). The effects of ICT on CO2 emissions along with economic growth, trade openness and financial development in Korea. Environmental and Resource Economics Review Volume, 30(2), 299-323. https://doi.org/10.15266/KEREA.2021.30.2.299
Le, T. H., Le, H. C., & Taghizadeh-Hesary, F. (2020). Does financial inclusion impact CO2 emissions? Evidence from Asia. Finance Research Letters, 34, 101451. https://doi.org/10.1016/j.frl.2020.101451
Lee, J. W., & Brahmasrene, T. (2014). ICT, CO2 emissions and economic growth: Evidence from a panel of ASEAN. Global Economic Review, 43(2), 93-109. https://doi.org/10.1080/1226508X.2014.917803
Lestari, N. I. (2020). OECD green growth policy review of Indonesia 2019 | Indonesia's effort to phase out and rationalise its fossil-fuel subsidies. Bulletin of Indonesian Economic Studies, 56(1), 133-135.
https://doi.org/10.1080/00074918.2020.1742959
Liu, Y., & Dong, F. (2021). How technological innovation impacts urban green economy efficiency in emerging economies: A case study of 278 Chinese cities. Resources, Conservation and Recycling, 169, 105534. https://doi.org/10.1016/j.resconrec.2021.105534
Lu, W., Niu, G., & Zhou, Y. (2021). Individualism and financial inclusion. Journal of Economic Behavior and Organization, 183, 268-288. https://doi.org/10.1016/j.jebo.2021.01.008
Luís, S., Vauclair, C. M., & Lima, M. L. (2018). Raising awareness of climate change causes? Cross-national evidence for the normalization of societal risk perception of climate change. Environmental Science and Policy, 80, 74-81. https://doi.org/10.1016/j.envsci.2017.11.015
N'dri, L. M., & Kakinaka, M. (2020). Financial inclusion, mobile money, and individual welfare: The case of Burkina Faso. Telecommunications Policy, 44(3), 101926. https://doi.org/10.1016/j.telpol.2020.101926
Nguyen, T. T., Pham, T. A. T., & Tram, H. T. X. (2020). Role of information and communication technologies and innovation in driving carbon emissions and economic growth in selected G-20 countries. Journal of Environmental Management, 261, 110162. https://doi.org/10.1016/j.jenvman.2020.110162
Park, Y., Meng, F., & Baloch, M. A. (2018). The effect of ICT, financial development, growth, and trade openness on CO2 emissions: An empirical analysis. Environmental Science and Pollution Research, 25(30), 30708-30719. https://doi.org/10.1007/s11356-018-3108-6
Pradhan, R. P., Arvin, M. B., Nair, M. S., Hall, J. H., & Bennett, S. E. (2021). Sustainable economic development in India: The dynamics between financial inclusion, ICT development, and economic growth. Technological Forecasting and Social Change, 169, 120758. https://doi.org/10.1016/j.techfore.2021.120758
Renzhi, N., & Baek, Y. J. (2020). Can financial inclusion be an effective mitigation measure? Evidence from panel data analysis of the environmental Kuznets curve. Finance Research Letters, 37, 101725. https://doi.org/10.1016/j.frl.2020.101725
Rita, D. I. G., Ferreira, F. A. F., Meidutė-Kavaliauskienė, I., Govindan, K., & Ferreira, J. J. M. (2018). Proposal of a green index for small and medium-sized enterprises: A multiple criteria group decision-making approach. Journal of Cleaner Production, 196, 985-996. https://doi.org/10.1016/j.jclepro.2018.05.275
Sadorsky, P. (2012). Correlations and volatility spillovers between oil prices and the stock prices of clean energy and technology companies. Energy Economics, 34(1), 248-255. https://doi.org/10.1016/j.eneco.2011.03.006
Salahuddin, M., & Alam, K. (2015). Internet usage, electricity consumption and economic growth in Australia: A time series evidence. Telematics and Informatics, 32(4), 862-878. https://doi.org/10.1016/j.tele.2015.04.011
Salahuddin, M., Alam, K., Ozturk, I., & Sohag, K. (2018). The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait. Renewable and Sustainable Energy Reviews, 81(2), 2002-2010. https://doi.org/10.1016/j.rser.2017.06.009
Shahbaz, M., Li, J., Dong, X., & Dong, K. (2022). How financial inclusion affects the collaborative reduction of pollutant and carbon emissions: The case of China. Energy Economics, 107, 105847. https://doi.org/10.1016/j.eneco.2022.105847
Tamazian, A., & Bhaskara Rao, B. (2010). Do economic, financial and institutional developments matter for environmental degradation? Evidence from transitional economies. Energy Economics, 32(1), 137-145. https://doi.org/10.1016/j.eneco.2009.04.004
Usman, M., Makhdum, M. S. A., & Kousar, R. (2021). Does financial inclusion, renewable and non-renewable energy utilization accelerate ecological footprints and economic growth? Fresh evidence from 15 highest emitting countries. Sustainable Cities and Society, 65, 102590. https://doi.org/10.1016/j.scs.2020.102590
Vo, D. H., Nguyen, N. T., Vo, A. T., Ho, C. M., & Nguyen, T. C. (2021). Does the Kuznets curve apply for financial development and environmental degradation in the Asia-Pacific region? Heliyon, 7(4), e06708. https://doi.org/10.1016/j.heliyon.2021.e06708
Zafar, M. W., Zaidi, S. A. H., Mansoor, S., Sinha, A., & Qin, Q. (2022). ICT and education as determinants of environmental quality: The role of financial development in selected Asian countries. Technological Forecasting and Social Change, 177, 121547. https://doi.org/10.1016/j.techfore.2022.121547
Zaidi, S. A. H., Hussain, M., & Uz Zaman, Q. (2021). Dynamic linkages between financial inclusion and carbon emissions: Evidence from selected OECD countries. Resources, Environment and Sustainability, 4, 100022. https://doi.org/10.1016/j.resenv.2021.100022
Copyright (c) 2022 UNIMAS Publisher
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
