IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v147y2025ics0140988325003640.html

The impact of environmental policy stringency and economic complexity on nations' energy transitions: The mediating role of fintech financing

Author

Listed:
  • Dabbous, Amal
  • Aoun Barakat, Karine
  • Ben Arfi, Wissal
  • Nammouri, Hela

Abstract

The degradation of the environment, driven by the reliance on fossil fuels, has prompted governments to shift towards renewable energy sources. While the topic of energy transitions is gaining researchers' attention, the contribution of factors related to policy, the environment, the economy, finance, and technology is still unclear. One such factor is environmental policy stringency that potentially reduces the ecological footprint and encourages green energy use. Another noteworthy factor is economic complexity, which supposes that countries dispose of resources to facilitate the green energy transition. Finally, FinTech (Financial Technology) is worth considering as it facilitates access to funds and promotes sustainable investments thus aiding energy transitions. This study therefore aims to empirically investigate the contribution of environmental policy stringency, economic complexity, and FinTech financing to countries' energy transitions and tests for the mediating role of FinTech. It uses panel data for 29 countries between 2010 and 2020 and employs Instrumental Variables (IV) 2-step GMM and IV 2-stage least squares estimation techniques. Results show that economic complexity and environmental policy stringency foster energy transitions. FinTech financing positively influences energy transitions and mediates the relation between energy transition and economic complexity. These findings show the importance of FinTech in funding cleaner energy sources, the significance of economic complexity in achieving energy transitions, and highlight the role of governments' stringent environmental policies in encouraging the move away from fossil fuels.

Suggested Citation

  • Dabbous, Amal & Aoun Barakat, Karine & Ben Arfi, Wissal & Nammouri, Hela, 2025. "The impact of environmental policy stringency and economic complexity on nations' energy transitions: The mediating role of fintech financing," Energy Economics, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:eneeco:v:147:y:2025:i:c:s0140988325003640
    DOI: 10.1016/j.eneco.2025.108540
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988325003640
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2025.108540?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Daniel Nachtigall & Luisa Lutz & Miguel Cárdenas Rodríguez & Filippo Maria D’Arcangelo & Ivan Haščič & Tobias Kruse & Rodrigo Pizarro, 2024. "The Climate Actions and Policies Measurement Framework: A Database to Monitor and Assess Countries’ Mitigation Action," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 191-217, January.
    2. Månberger, André & Stenqvist, Björn, 2018. "Global metal flows in the renewable energy transition: Exploring the effects of substitutes, technological mix and development," Energy Policy, Elsevier, vol. 119(C), pages 226-241.
    3. Bersalli, Germán & Menanteau, Philippe & El-Methni, Jonathan, 2020. "Renewable energy policy effectiveness: A panel data analysis across Europe and Latin America," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).
    4. Muhlis Can & Zahoor Ahmed, 2023. "Towards sustainable development in the European Union countries: Does economic complexity affect renewable and non‐renewable energy consumption?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 439-451, February.
    5. Lisha, Liu & Mousa, Saeed & Arnone, Gioia & Muda, Iskandar & Huerta-Soto, Rosario & Shiming, Zhai, 2023. "Natural resources, green innovation, fintech, and sustainability: A fresh insight from BRICS," Resources Policy, Elsevier, vol. 80(C).
    6. Giulio Cornelli & Sebastian Doerr & Lavinia Franco & Jon Frost, 2021. "Funding for fintechs: patterns and drivers," BIS Quarterly Review, Bank for International Settlements, September.
    7. Galeotti, Marzio & Salini, Silvia & Verdolini, Elena, 2020. "Measuring environmental policy stringency: Approaches, validity, and impact on environmental innovation and energy efficiency," Energy Policy, Elsevier, vol. 136(C).
    8. Sohag, Kazi & Husain, Shaiara & Soytas, Ugur, 2024. "Environmental policy stringency and ecological footprint linkage: Mitigation measures of renewable energy and innovation," Energy Economics, Elsevier, vol. 136(C).
    9. Hartmann, Dominik & Guevara, Miguel R. & Jara-Figueroa, Cristian & Aristarán, Manuel & Hidalgo, César A., 2017. "Linking Economic Complexity, Institutions, and Income Inequality," World Development, Elsevier, vol. 93(C), pages 75-93.
    10. Mertzanis, Charilaos, 2023. "FinTech finance and social-environmental performance around the world," Finance Research Letters, Elsevier, vol. 56(C).
    11. Feng, Chao & Liu, Yu-Qi & Yang, Jun, 2024. "Do energy trade patterns affect renewable energy development? The threshold role of digital economy and economic freedom," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    12. Khezri, Mohsen & Heshmati, Almas & Khodaei, Mehdi, 2022. "Environmental implications of economic complexity and its role in determining how renewable energies affect CO2 emissions," Applied Energy, Elsevier, vol. 306(PB).
    13. Adebayo, Tomiwa Sunday & Alola, Andrew Adewale, 2023. "Drivers of natural gas and renewable energy utilization in the USA: How about household energy efficiency-energy expenditure and retail electricity prices?," Energy, Elsevier, vol. 283(C).
    14. repec:bla:obuest:v:61:y:1999:i:0:p:631-52 is not listed on IDEAS
    15. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LLC, vol. 7(3), pages 281-312, September.
    16. Huang, Yongming & Haseeb, Mohammad & Usman, Muhammad & Ozturk, Ilhan, 2022. "Dynamic association between ICT, renewable energy, economic complexity and ecological footprint: Is there any difference between E-7 (developing) and G-7 (developed) countries?," Technology in Society, Elsevier, vol. 68(C).
    17. Shahbaz, Muhammad & Wang, Jianda & Dong, Kangyin & Zhao, Jun, 2022. "The impact of digital economy on energy transition across the globe: The mediating role of government governance," Renewable and Sustainable Energy Reviews, Elsevier, vol. 166(C).
    18. Liao, Jixiang & Liu, Xingye & Zhou, Xueyan & Tursunova, Nargiza Rakhimovna, 2023. "Analyzing the role of renewable energy transition and industrialization on ecological sustainability: Can green innovation matter in OECD countries," Renewable Energy, Elsevier, vol. 204(C), pages 141-151.
    19. Tao, Ran & Su, Chi-Wei & Naqvi, Bushra & Rizvi, Syed Kumail Abbas, 2022. "Can Fintech development pave the way for a transition towards low-carbon economy: A global perspective," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    20. Hassan, Mahmoud & Kouzez, Marc & Lee, Ji-Yong & Msolli, Badreddine & Rjiba, Hatem, 2024. "Does increasing environmental policy stringency enhance renewable energy consumption in OECD countries?," Energy Economics, Elsevier, vol. 129(C).
    21. Mewes, Lars & Broekel, Tom, 2022. "Technological complexity and economic growth of regions," Research Policy, Elsevier, vol. 51(8).
    22. Dogan, Eyup & Chishti, Muhammad Zubair & Karimi Alavijeh, Nooshin & Tzeremes, Panayiotis, 2022. "The roles of technology and Kyoto Protocol in energy transition towards COP26 targets: Evidence from the novel GMM-PVAR approach for G-7 countries," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    23. Croutzet, Alexandre & Dabbous, Amal, 2021. "Do FinTech trigger renewable energy use? Evidence from OECD countries," Renewable Energy, Elsevier, vol. 179(C), pages 1608-1617.
    24. Jin, Guangzhu & Huang, Zhenhui, 2024. "Resource curse or resource boon? Appraising the mediating role of fin-tech in realizing natural resources-green growth nexus in MENA region," Resources Policy, Elsevier, vol. 89(C).
    25. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    26. Child, Michael & Koskinen, Otto & Linnanen, Lassi & Breyer, Christian, 2018. "Sustainability guardrails for energy scenarios of the global energy transition," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 321-334.
    27. Shahzad, Umer & Doğan, Buhari & Sinha, Avik & Fareed, Zeeshan, 2021. "Does Export product diversification help to reduce energy demand: Exploring the contextual evidences from the newly industrialized countries," Energy, Elsevier, vol. 214(C).
    28. Lee, Chi-Chuan & Song, Hepeng & An, Jiafu, 2024. "The impact of green finance on energy transition: Does climate risk matter?," Energy Economics, Elsevier, vol. 129(C).
    29. Charfeddine, Lanouar & Ben Khediri, Karim, 2016. "Financial development and environmental quality in UAE: Cointegration with structural breaks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 1322-1335.
    30. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    31. Zhang, Mingming & Zhang, Shichang & Lee, Chien-Chiang & Zhou, Dequn, 2021. "Effects of trade openness on renewable energy consumption in OECD countries: New insights from panel smooth transition regression modelling," Energy Economics, Elsevier, vol. 104(C).
    32. Adekoya, Oluwasegun B. & Kenku, Oluwademilade T. & Oliyide, Johnson A. & Al-Faryan, Mamdouh Abdulaziz Saleh & Ogunjemilua, Oluwafemi D., 2023. "Does economic complexity drive energy efficiency and renewable energy transition?," Energy, Elsevier, vol. 278(C).
    33. Mealy, Penny & Teytelboym, Alexander, 2022. "Economic complexity and the green economy," Research Policy, Elsevier, vol. 51(8).
    34. Sun, Yunpeng & Li, Tonxin & Mehmood, Usman, 2025. "Balancing acts: Assessing the roles of renewable energy, economic complexity, Fintech, green finance, green growth, and economic performance in G-20 countries amidst sustainability efforts," Applied Energy, Elsevier, vol. 378(PA).
    35. Chapman, Andrew J. & Itaoka, Kenshi, 2018. "Energy transition to a future low-carbon energy society in Japan's liberalizing electricity market: Precedents, policies and factors of successful transition," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2019-2027.
    36. Yinghua Ren & Yingxin Mo & Wanhai You, 2025. "Economic complexity, CO2 emissions, and the mediating roles of energy structure and energy efficiency: a spatial panel analysis," Applied Economics, Taylor & Francis Journals, vol. 57(1), pages 1-15, January.
    37. Mahmoud Hassan & Damien Rousselière, 2022. "Does increasing environmental policy stringency lead to accelerated environmental innovation? A research note," Applied Economics, Taylor & Francis Journals, vol. 54(17), pages 1989-1998, April.
    38. Muhammad Tariq Majeed & Maria Mazhar & Isma Samreen & Aisha Tauqir, 2022. "Economic complexities and environmental degradation: evidence from OECD countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5846-5866, April.
    39. Jeroen C. J. M. van den Bergh, 2017. "A third option for climate policy within potential limits to growth," Nature Climate Change, Nature, vol. 7(2), pages 107-112, February.
    40. Wintoki, M. Babajide & Linck, James S. & Netter, Jeffry M., 2012. "Endogeneity and the dynamics of internal corporate governance," Journal of Financial Economics, Elsevier, vol. 105(3), pages 581-606.
    41. Yue, Shujing & Lu, Rou & Shen, Yongchang & Chen, Hongtao, 2019. "How does financial development affect energy consumption? Evidence from 21 transitional countries," Energy Policy, Elsevier, vol. 130(C), pages 253-262.
    42. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2024. "Regulatory Stringency and Emission Leakage Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(6), pages 1407-1424, June.
    43. Lee, Jung Wan, 2013. "The contribution of foreign direct investment to clean energy use, carbon emissions and economic growth," Energy Policy, Elsevier, vol. 55(C), pages 483-489.
    44. Ahmad, Mahmood & Pata, Ugur Korkut & Ahmed, Zahoor & Zhao, Ruiqi, 2024. "Fintech, natural resources management, green energy transition, and ecological footprint: Empirical insights from EU countries," Resources Policy, Elsevier, vol. 92(C).
    45. Murshed, Muntasir, 2020. "Are Trade Liberalization policies aligned with Renewable Energy Transition in low and middle income countries? An Instrumental Variable approach," Renewable Energy, Elsevier, vol. 151(C), pages 1110-1123.
    46. Jushan Bai & Sung Hoon Choi & Yuan Liao, 2021. "Feasible generalized least squares for panel data with cross-sectional and serial correlations," Empirical Economics, Springer, vol. 60(1), pages 309-326, January.
    47. Xu, Si & Zhang, You & Chen, Lan & Leong, Lin Woon & Muda, Iskandar & Ali, Anis, 2023. "How Fintech and effective governance derive the greener energy transition: Evidence from panel-corrected standard errors approach," Energy Economics, Elsevier, vol. 125(C).
    48. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Khan, Naveed R. & Mirza, Faisal Mehmood & Hou, Fujun & Kirmani, Syed Ali Ashiq, 2019. "The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: The case of the United States," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    49. Zeng, Li & Wong, Wing-Keung & Fu, Hu & Mahmoud, Haitham A. & Cong, Phan The & Thuy, Dinh Thi Thanh & Bach, Pham Xuan, 2024. "FinTech and sustainable financing for low carbon energy transitions: A biodiversity and natural resource perspective in BRICS economies," Resources Policy, Elsevier, vol. 88(C).
    50. Sinha, Avik & Bekiros, Stelios & Hussain, Nazim & Nguyen, Duc Khuong & Khan, Sana Akbar, 2023. "How social imbalance and governance quality shape policy directives for energy transition in the OECD countries?," Energy Economics, Elsevier, vol. 120(C).
    51. Hossain, Mohammad Razib & Dash, Devi Prasad & Das, Narasingha & Ullah, Ehsan & Hossain, Md. Emran, 2024. "Green energy transition in OECD region through the lens of economic complexity and environmental technology: A method of moments quantile regression perspective," Applied Energy, Elsevier, vol. 365(C).
    52. Sun, Yunpeng & Bao, Qun & Siao-Yun, Wei & Islam, Misbah ul & Razzaq, Asif, 2022. "Renewable energy transition and environmental sustainability through economic complexity in BRICS countries: Fresh insights from novel Method of Moments Quantile regression," Renewable Energy, Elsevier, vol. 184(C), pages 1165-1176.
    53. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    54. M. Hassan & M. Kouzez & J. Y. Lee & B. Msolli & H. Rjibae, 2024. "Does Increasing Environmental Policy Stringency Enhance Renewable Energy Consumption in OECD Countries?," Post-Print hal-04350282, HAL.
    55. Afshan, Sahar & Ozturk, Ilhan & Yaqoob, Tanzeela, 2022. "Facilitating renewable energy transition, ecological innovations and stringent environmental policies to improve ecological sustainability: Evidence from MM-QR method," Renewable Energy, Elsevier, vol. 196(C), pages 151-160.
    56. Chen, Tianqi & Zhang, Yi & Jiang, Cailou & Li, Hui, 2023. "How does energy efficiency affect employment? Evidence from Chinese cities," Energy, Elsevier, vol. 280(C).
    57. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brahim Bergougui & Ousama Ben-Salha, 2025. "The Impact of Environmental Governance on Energy Transitions: Evidence from a Global Perspective," Sustainability, MDPI, vol. 17(19), pages 1-24, September.
    2. Ahmad, Mahmood & Pata, Ugur Korkut & Ahmed, Zahoor & Zhao, Ruiqi, 2024. "Fintech, natural resources management, green energy transition, and ecological footprint: Empirical insights from EU countries," Resources Policy, Elsevier, vol. 92(C).
    3. Lv, Zhaojiang & Chen, Lan & Ali, Syed Ahtsham & Muda, Iskandar & Alromaihi, Abdullah & Boltayev, Jurabek Yusufovich, 2024. "Financial technologies, green technologies and natural resource nexus with sustainable development goals: Evidence from resource abundant economies using MMQR estimation," Resources Policy, Elsevier, vol. 89(C).
    4. Dabbous, Amal & Croutzet, Alexandre & Horn, Matthias, 2025. "Achieving energy resilience: The joint role of environmental policy stringency and environmental awareness," Research in International Business and Finance, Elsevier, vol. 74(C).
    5. Dunbar, Kwamie & Treku, Daniel N., 2025. "Do energy transition investment flows aid climate commitments?," Energy Economics, Elsevier, vol. 142(C).
    6. Wang, Shubin & Li, Jiabao & Zhao, Erlong, 2024. "Exploring the role of financial technologies and digital trade in shaping trade-adjusted resource consumption in E7 countries," Resources Policy, Elsevier, vol. 88(C).
    7. Sahu, Anjan Kumar & Mahalik, Mantu Kumar, 2025. "From policy to practice: The mediating role of innovation in renewable energy adoption in OECD nations," Innovation and Green Development, Elsevier, vol. 4(3).
    8. Sohag, Kazi & Islam, Md. Monirul & Hammoudeh, Shawkat, 2024. "From policy stringency to environmental resilience: Unraveling the dose-response dynamics of environmental parameters in OECD countries," Energy Economics, Elsevier, vol. 134(C).
    9. Ozturk, Ilhan & Ullah, Sana & Sohail, Sidra & Sohail, Muhammad Tayyab, 2025. "How do digital government, circular economy, and environmental regulatory stringency affect renewable energy production?," Energy Policy, Elsevier, vol. 203(C).
    10. Chu, Lan Khanh, 2024. "Towards achieving energy transition goal: How do green financial policy, environmental tax, economic complexity, and globalization matter?," Renewable Energy, Elsevier, vol. 222(C).
    11. M. Hassan & M. Kouzez & J. Y. Lee & B. Msolli & H. Rjibae, 2024. "Does Increasing Environmental Policy Stringency Enhance Renewable Energy Consumption in OECD Countries?," Post-Print hal-04350282, HAL.
    12. Hassan, Mahmoud & Kouzez, Marc & Lee, Ji-Yong & Msolli, Badreddine & Rjiba, Hatem, 2024. "Does increasing environmental policy stringency enhance renewable energy consumption in OECD countries?," Energy Economics, Elsevier, vol. 129(C).
    13. Nam Thanh Vu & Hung Quang Bui & Tuan Anh Pham & Duc Hong Vo, 2024. "Fintech development and environmental sustainability: Does income inequality matter?," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 350-369, June.
    14. Appiah, Michael & Li, Mingxing & Sehrish, Saba & Abaji, Emad Eddin, 2023. "Investigating the connections between innovation, natural resource extraction, and environmental pollution in OECD nations; examining the role of capital formation," Resources Policy, Elsevier, vol. 81(C).
    15. Sung, Bongsuk & Song, Woo-Yong & Park, Sang-Do, 2018. "How foreign direct investment affects CO2 emission levels in the Chinese manufacturing industry: Evidence from panel data," Economic Systems, Elsevier, vol. 42(2), pages 320-331.
    16. Mamkhezri, Jamal, 2025. "Assessing price elasticity in US residential electricity consumption: A comparison of monthly and annual data with recession implications," Energy Policy, Elsevier, vol. 200(C).
    17. Tao, Miaomiao & Tiwari, Aviral Kumar & Poletti, Stephen & Roubaud, David & Silva, Emilson, 2025. "The credibility of environmental policy stringency: Implications for sustainability in OECD Countries," Energy Economics, Elsevier, vol. 146(C).
    18. Liu, Fangying & Su, Chi Wei & Tao, Ran & Qin, Meng & Umar, Muhammad, 2024. "Fintech and aluminium: Strategic enablers of climate change mitigation and sustainable mineral policy," Resources Policy, Elsevier, vol. 91(C).
    19. Sahu, Anjan Kumar & Mahalik, Mantu Kumar, 2025. "The linkage between income inequality, opportunity and renewable energy demand: Panel evidence from OECD economies," Renewable Energy, Elsevier, vol. 243(C).
    20. Hou Renyong & Aman Ali Sedik, 2023. "Environmental Sustainability and Foreign Direct Investment in East Africa: Institutional and Policy Benefits for Environmental Sustainability," Sustainability, MDPI, vol. 15(2), pages 1-22, January.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:147:y:2025:i:c:s0140988325003640. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.