An outlook at the switch to renewable energy in emerging economies: The beneficial effect of technological innovation and green finance

The transition to cleaner energy is crucial for a sustainable environment. Renewable energy plays a significant role in curtailing carbon emissions, and environmental advocates have recently emphasized the pressing necessity to investigate the various factors that cause the switch to clean energy. By assessing 30-year (1990–2020) panel data from seven emerging (E7) nations, this study extends the breadth of this discourse by offering potential factors that contribute to the energy transition. This study delves into the dynamic implications of economic growth, green finance, technological innovation, and urbanization on the progression of renewable energy transition (RET). The study employed the cross-section autoregressive distributed lag (CSARDL) model to address challenges related to varying slopes and cross-section interdependencies in the panel data structure. The research outcomes established that economic growth, technological innovation, and green finance benefit RET. Contrarily, the empirical result delineated that urbanization derailed the deployment of RET in the E7 nations. Finally, there is an uni-directional causality among green finance, technological innovation, and RET, whereas a bi-directional causality exists among economic growth, urbanization, and RET. To promote the development of RET in the E7 and other developing countries, this article highlights a variety of policy alternatives.