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Can financial inclusion be an effective mitigation measure? evidence from panel data analysis of the environmental Kuznets curve

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  • Renzhi, Nuobu
  • Baek, Yong Jun

Abstract

This study demonstrates the existence of financial inclusion-based environment Kuznets curve (EKC) by analyzing a panel of 103 countries during 2004–2014. The relationship between financial inclusion and CO2 emissions is found to be an inverted U-shape. This finding is robust to different measurements of the financial inclusion index constructed by principal composite analysis and modifications of the estimation model. The existence of a financial inclusion-based EKC provides an important policy insight that financial inclusion can be used as a mitigation measure. Therefore, policy makers should consider the synergy effect of financial inclusion in designing development and climate change policies.

Suggested Citation

  • Renzhi, Nuobu & Baek, Yong Jun, 2020. "Can financial inclusion be an effective mitigation measure? evidence from panel data analysis of the environmental Kuznets curve," Finance Research Letters, Elsevier, vol. 37(C).
    • Handle: RePEc:eee:finlet:v:37:y:2020:i:c:s1544612319314849
    DOI: 10.1016/j.frl.2020.101725
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    More about this item

    Keywords

    Financial inclusion; Environmental Kuznets curve; Mitigation measure; Climate change policy; Global panel data;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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