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Financial development and macroeconomic sustainability: modeling based on a modified environmental Kuznets curve

Author

Listed:
  • Adel Ben Youssef

    (UniCA - Université Côte d'Azur)

  • Sabri Boubaker

    (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School)

  • Anis Omri

    (Qassim University [Kingdom of Saudi Arabia], UCAR - Université de Carthage (Tunisie) = University of Carthage)

Abstract

Sustainability has become an important and widely applied concept in the environmental economics literature. Despite the numerous studies employing an environmental Kuznets curve (EKC) this model has been critiqued for its incompleteness. This article builds a modified EKC model to examine the contribution of financial development for achieving sustainable development. Using data for 14 selected Middle East and North Africa (MENA) countries during 1990-2017, the empirical results show that the EKC hypothesis is valid for per capita CO 2 emissions and ecological footprint. The results provide evidence also of the presence of linear and non-linear relationships between financial development and non-sustainability and indicate that financial development is likely to have a small long-term impact on sustainable development. This suggests that current efforts aimed at protecting the environment and achieving sustainability will be ineffective given the extent of the problem.

Suggested Citation

  • Adel Ben Youssef & Sabri Boubaker & Anis Omri, 2020. "Financial development and macroeconomic sustainability: modeling based on a modified environmental Kuznets curve," Post-Print hal-03052901, HAL.
    • Handle: RePEc:hal:journl:hal-03052901
    DOI: 10.1007/s10584-020-02914-z
    Note: View the original document on HAL open archive server: https://hal.science/hal-03052901v1
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    Cited by:

    1. Eshun, Samuel Fiifi & Kočenda, Evžen, 2025. "Money talks, green walks: Does financial inclusion promote green sustainability in Africa?," Global Finance Journal, Elsevier, vol. 64(C).
    2. Gaies, Brahim & Nakhli, Mohamed Sahbi & Sahut, Jean-Michel, 2022. "What are the effects of economic globalization on CO2 emissions in MENA countries?," Economic Modelling, Elsevier, vol. 116(C).
    3. Muhammad Zahid Rafique & Abdul Majeed Nadeem & Wanjun Xia & Majid Ikram & Hafiz Muhammad Shoaib & Umer Shahzad, 2022. "Does economic complexity matter for environmental sustainability? Using ecological footprint as an indicator," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 4623-4640, April.
    4. Zhang, Dongna & Chen, Xihui Haviour & Lau, Chi Keung Marco & Xu, Bing, 2023. "Implications of cryptocurrency energy usage on climate change," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    5. Boubaker, Sabri & Omri, Anis, 2022. "How does renewable energy contribute to the growth versus environment debate?," Resources Policy, Elsevier, vol. 79(C).
    6. Nada Amer Abdulhafedh Al-Kubati & Zulkefly Abdul Karim & Norlin Khalid & M. Kabir Hassan, 2022. "The Impact of Sub-Sector of Economic Activity and Financial Development on Environmental Degradation: New Evidence Using Dynamic Heterogeneous Panel," Mathematics, MDPI, vol. 10(23), pages 1-23, November.
    7. Ahmad Altwaijri & Anis Omri & Faisal Alfehaid, 2024. "Promoting entrepreneurship for sustainable development: Are education capital and ICT diffusion important?," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(5), pages 5463-5487, October.
    8. Huang, Hao & Akbari, Faeze, 2024. "Integrated sustainability perspective and spillover effects of social, environment and economic pillars: A case study using SEY model," Socio-Economic Planning Sciences, Elsevier, vol. 96(C).
    9. Dhahri, Sabrine & Omri, Anis & Mirza, Nawazish, 2024. "Information technology and financial development for achieving sustainable development goals," Research in International Business and Finance, Elsevier, vol. 67(PA).
    10. Louis David Junior Annor & Margarita Robaina & Elisabete Vieira, 2025. "Financial development, inclusive growth, and environmental quality: emerging markets perspective," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(3), pages 7407-7433, March.
    11. Meo, Muhammad Saeed & Ben Zaied, Younes & Afshan, Sahar & Anees, Alvena, 2025. "Capitalizing on sustainability: China's green finance strategy for achieving environmentally resilient wastewater treatment," International Review of Economics & Finance, Elsevier, vol. 101(C).
    12. Agha Amad Nabi & Farhan Ahmed & Fayaz Hussain Tunio & Muhammad Hafeez & Daniela Haluza, 2025. "Assessing the Impact of Green Environmental Policy Stringency on Eco-Innovation and Green Finance in Pakistan: A Quantile Autoregressive Distributed Lag (QARDL) Analysis for Sustainability," Sustainability, MDPI, vol. 17(3), pages 1-18, January.
    13. Dhahri, Sabrine & Slimani, Sana & Omri, Anis, 2021. "Behavioral entrepreneurship for achieving the sustainable development goals," Technological Forecasting and Social Change, Elsevier, vol. 165(C).
    14. Zhao, Jing, 2024. "Impact of green finance on low-carbon transformation: Spatial spillover effects in China," The North American Journal of Economics and Finance, Elsevier, vol. 74(C).

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