The Relationship Between Financial Innovation and Environmental Pollution in OECD Countries

Authors : Murat Tekbaş

Pages : 195-207

Doi:10.54821/uiecd.1331928

View : 32 | Download : 25

Publication Date : 2023-09-30

Article Type : Research

Abstract :Climate changes as a result of environmental degradation have negative effects in many areas. Many studies in the economics literature have examined the effects of these negativities from different perspectives. In this study, the relationship between financial innovation and CO2 emission, which is newly used in the literature, is examined for 14 OECD member countries. LLC and IPS unit root tests, Pedroni and Kao cointegration tests and FMOLS estimator were used in the analyses for the period between 2009 and 2019. According to the findings obtained from the analyses, it is seen that financial innovation, economic growth and urbanization have negative effects on CO2 emissions. In addition, in the results of Dumitrescu-Hurlin causality test applied in the study, it was determined that there is a bidirectional causality relationship between economic growth, urbanization and CO2 emissions, and a unidirectional causality relationship between financial innovation and CO2 emissions. In this direction, it is considered important that companies and governments should act together. It is considered that the creation of green loans by financial intermediaries for environmentally sensitive projects can encourage investors. In order to prevent environmental degradation from a holistic perspective, the government should take measures such as subsidies and tax reductions to encourage environmentally friendly projects.
Keywords : Finansal İnovasyon, CO2 Emisyonu, Kentleşme, Ekonomik Büyüme, Panel Veri Analizi