Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible?
Since the industrial revolution, countries have been facing the issue of climate change and environmental degradation. It is widely believed that the investment in research and development of renewable energy can play a pivotal role in fighting against climate change. However, the financial risk als...
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2022-05-01
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| Series: | Frontiers in Environmental Science |
| Subjects: | |
| Online Access: | https://www.frontiersin.org/articles/10.3389/fenvs.2022.909190/full |
| _version_ | 1811305761487192064 |
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| author | Mahmood Ahmad Zahoor Ahmed Zahoor Ahmed Beata Gavurova Judit Oláh Judit Oláh |
| author_facet | Mahmood Ahmad Zahoor Ahmed Zahoor Ahmed Beata Gavurova Judit Oláh Judit Oláh |
| author_sort | Mahmood Ahmad |
| collection | DOAJ |
| description | Since the industrial revolution, countries have been facing the issue of climate change and environmental degradation. It is widely believed that the investment in research and development of renewable energy can play a pivotal role in fighting against climate change. However, the financial risk also increases, which can influence renewable energy technology R&D budgets and environmental sustainability. Nevertheless, the current literature is silent on the linkage between financial risk, renewable energy technology budgets, and environmental quality. Against this backdrop, this article attempts to explore the dynamic linkage between financial risk, renewable energy technology budgets, and ecological footprint under the Environment Kuznets Curve (EKC) framework in Organization for Economic Cooperation and Development (OECD) countries. For this purpose, yearly data from 1984 to 2018 is employed using the advanced panel data estimation methods that address the slope heterogeneity and cross-sectional dependence issues. The results indicate that improvement in the financial risk index significantly decreases footprints, and renewable energy technology budgets also promote environmental sustainability. Economic globalization poses a significant negative effect on the ecological footprint, while energy consumption adds to the footprint. Moreover, the findings validated the EKC hypothesis in OECD countries. In addition, a unidirectional causality is detected from financial risk to renewable technology energy budgets, while bidirectional causality exists between financial risk and ecological footprint, and between financial risk, and economic growth. Based on the empirical findings, policy suggestions are presented to promote environmental sustainability. |
| first_indexed | 2024-04-13T08:32:15Z |
| format | Article |
| id | doaj.art-5e7d1c8bea3f441e90bc324e2aa73d94 |
| institution | Directory Open Access Journal |
| issn | 2296-665X |
| language | English |
| last_indexed | 2024-04-13T08:32:15Z |
| publishDate | 2022-05-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Environmental Science |
| spelling | doaj.art-5e7d1c8bea3f441e90bc324e2aa73d942022-12-22T02:54:13ZengFrontiers Media S.A.Frontiers in Environmental Science2296-665X2022-05-011010.3389/fenvs.2022.909190909190Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible?Mahmood Ahmad0Zahoor Ahmed1Zahoor Ahmed2Beata Gavurova3Judit Oláh4Judit Oláh5Business School, Shandong University of Technology, Zibo, ChinaDepartment of Accounting and Finance, Faculty of Economics and Administrative Sciences, Cyprus International University, Nicosia, TurkeyDepartment of Economics, School of Business, AKFA University, Tashkent, UzbekistanFaculty of Mining, Ecology, Process Control and Geotechnologies, Technical University of Košice, Košice, SlovakiaFaculty of Economics and Business, University of Debrecen, Debrecen, HungaryDepartment of Public Management and Governance, College of Business and Economics, University of Johannesburg, Johannesburg, South AfricaSince the industrial revolution, countries have been facing the issue of climate change and environmental degradation. It is widely believed that the investment in research and development of renewable energy can play a pivotal role in fighting against climate change. However, the financial risk also increases, which can influence renewable energy technology R&D budgets and environmental sustainability. Nevertheless, the current literature is silent on the linkage between financial risk, renewable energy technology budgets, and environmental quality. Against this backdrop, this article attempts to explore the dynamic linkage between financial risk, renewable energy technology budgets, and ecological footprint under the Environment Kuznets Curve (EKC) framework in Organization for Economic Cooperation and Development (OECD) countries. For this purpose, yearly data from 1984 to 2018 is employed using the advanced panel data estimation methods that address the slope heterogeneity and cross-sectional dependence issues. The results indicate that improvement in the financial risk index significantly decreases footprints, and renewable energy technology budgets also promote environmental sustainability. Economic globalization poses a significant negative effect on the ecological footprint, while energy consumption adds to the footprint. Moreover, the findings validated the EKC hypothesis in OECD countries. In addition, a unidirectional causality is detected from financial risk to renewable technology energy budgets, while bidirectional causality exists between financial risk and ecological footprint, and between financial risk, and economic growth. Based on the empirical findings, policy suggestions are presented to promote environmental sustainability.https://www.frontiersin.org/articles/10.3389/fenvs.2022.909190/fullfinancial riskrenewable energy technology budgetsenvironmental sustainabilityOECDCS-ARDL |
| spellingShingle | Mahmood Ahmad Zahoor Ahmed Zahoor Ahmed Beata Gavurova Judit Oláh Judit Oláh Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? Frontiers in Environmental Science financial risk renewable energy technology budgets environmental sustainability OECD CS-ARDL |
| title | Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? |
| title_full | Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? |
| title_fullStr | Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? |
| title_full_unstemmed | Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? |
| title_short | Financial Risk, Renewable Energy Technology Budgets, and Environmental Sustainability: Is Going Green Possible? |
| title_sort | financial risk renewable energy technology budgets and environmental sustainability is going green possible |
| topic | financial risk renewable energy technology budgets environmental sustainability OECD CS-ARDL |
| url | https://www.frontiersin.org/articles/10.3389/fenvs.2022.909190/full |
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