The effect of financial development measured by banks, bonds, and stocks on carbon dioxide emissions (CO
2
E) has been widely studied while not much is known about the effect of the insurance sector ...development on CO
2
E. Thus, this study fills this void by estimating the effect of insurance consumption on CO
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E for BRICS (Brazil, Russia, India, China, and South Africa) from 2000 to 2016 using the instrumental variable generalized method of moments model. The findings indicate that, generally, insurance sector development spurs CO
2
E in BRICS. Specifically, a 10% rise in life insurance development increases BRICS CO
2
E by 1%. Also, a 10% rise in non-life insurance development increases BRICS CO
2
E by 4%. Finally, a 10% rise in the composite insurance development index increases BRICS CO
2
E by 2%. The study further finds that population size, trade openness, and energy consumption drive CO
2
E in BRICS, while economic growth mitigates CO
2
E. These results were robust to alternative econometric estimators, and alternative CO
2
E proxy. Policies that promote green insurance consumption are recommended.
We re‐examine the links between financial development and the real economy in Ghana given the gaps in the literature, recent happenings in the financial sector, new dataset, and the more active ...interventions by the Bank of Ghana to inform good policy decisions. By employing the Autoregressive Distributed Lag Bounds Cointegration approach (ARDL) and the Fully Modified OLS model (FMOLS), the study documented broad money supply, domestic credit provided by the financial sector, domestic credit to the private sector, bank deposit to GDP, liquid liabilities to GDP, deposit money banks assets to GDP, deposit money bank assets to deposit money bank assets and central bank assets, non‐life insurance premium volume to GDP, stock market capitalization to GDP and the number of listed companies to have a significant negative effect on Ghana's economic growth in the long‐run. The joint effect of financial development was also found to have a significant negative effect on Ghana's economic growth from the FMOLS model. The study recommended the imperative for policymakers to increase infrastructure investment by promoting reforms to boost cooperation between civil societies, the public sector, and the private sector to address the high cost of investment to improve the macroeconomic performance of the country. The study further recommended policymakers to support the financial sector by injecting liquidity during these distress times.
We address the question: which countries-rich (high-income countries) or poor (middle-income and low-income countries) - tend to gain more from the Information and Communication Technology (ICT) ...revolution? By employing a panel of 123 countries consisting of 45 high-income countries, 58 middle-income countries, and 20 low-income countries from 2002 to 2017 and by constructing ICT index from mobile, internet, and fixed broadband, we find that in general ICT increases economic growth in both countries, however, poor countries tend to gain more from the ICT revolution.
•Examine the impact of ICT on economic growth by comparing rich and poor countries.•Employ a panel of 123 countries for the period 2002–2017.•Construct ICT index from mobile, internet, and fixed broadband use.•ICT increases economic growth in both countries.•Poor countries tend to benefit more than rich countries from the ICT revolution.
This study explored the role of financial development in foreign aid (measured by agriculture, humanitarian, health, economic infrastructure and services, and education aid) and economic growth ...relationship for 37 African countries spanning the 2002-2018 period. Using the instrumental variable generalized method of moments model, our findings indicated that while foreign aid impedes Africa's growth, financial development spurs economic growth. The conditional effect analysis showed that financial development conditions foreign aid to spur economic growth. The country-specific analysis further showed that foreign aid has a higher growth elasticity in countries with relatively better financial systems, such as Mauritius, South Africa, Gabon, Tunisia, and Botswana, whilst the growth elasticity of aid is smaller in countries with a relatively weak financial system such as Malawi, Guinea Bissau, Sierra Leone, and the Democratic Republic of Congo. The study recommended the need for policymakers in Africa to implement innovative ways to improve domestic revenue mobilization. The study also recommended that policymakers in Africa should create an enabling environment that will enhance the development of Africa's financial system to mitigate the adverse effect of aid on economic growth.
Ending poverty in all its forms by 2030 remains the first agenda of Sustainable Development Goals set by the United Nations in 2015. Motivated by this agenda, this study examined the direct and ...indirect effect of financial technology (fintech) and its sub-measures of third-party payment and credit on poverty measured by household per capita consumption. We used a panel of 31 provinces in China from 2011 to 2017. The results indicated that fintech and these sub-measures reduce poverty in China. The results further showed that fintech complements economic growth and financial development to reduce poverty in China.
The adversities of climate change facing the world highlight the importance of reducing the rise of global carbon emissions (CO2E), which is a top priority for policymakers and researchers. Renewable ...energy is hailed as a remedy to the rise in global CO2E. However, there are persistently low levels of global renewable energy investment (REI). This study, therefore, examines the linear and non-linear effect of REI (measured by solar, wind, small hydropower, geothermal, biomass, marine, and biofuel energy investment) on CO2E using a global dataset from 2004Q1 to 2018Q1. The study also examines the economic growth mechanism through which REI influences CO2E. Using the Ordinarily Least Squares model, the findings show that all the measures of REI significantly increase CO2E from the linear analysis. However, the non-linear analysis showed that solar and wind energy investment have a statistically significant inverted U-shaped relationship with CO2E while small hydropower and biofuel energy investment have a statistically significant U-shaped relationship with CO2E. Thus, solar and wind energy investment reduce CO2E only after attaining a threshold of investment with the threshold value of solar and wind energy investment being 28.125 (representing about $1.64 trillion) and 26.308 (representing about $266.3 billion), respectively. Also, the threshold value of small hydropower and biofuel energy investment beyond which they increase CO2E are 20.071 (representing about $520.9 million) and 22.8 (representing about $7.978 billion), respectively. Finally, solar, wind and geothermal energy investment indirectly reduce CO2E by increasing green economic growth while the reverse exists for biofuel energy investment. Solar and wind energy investment is, therefore, recommended for attaining carbon neutrality targets. Policymakers should incentivize production tax credits, investment tax credits, feed-in-tariffs, subsidies, affordable loans, and research and development to drive solar and wind energy investment.
Financial technology (fintech) has seen fast development recently in China; however, studies exploring the contributions of fintech to China’s economic growth remain limited. Thus, this study ...motivated by the knowledge gaps and fast expansion of fintech examined: (i) the impact of fintech and the submeasures of third-party payment, credit, and insurance on China’s economic growth; (ii) the regional and provincial impact of fintech on China’s economic growth; (iii) the causality relationships between fintech and economic growth. By using a sample of 31 provinces in China and the instrumental variable generalized method of moments (IV–GMM) technique, the study established the following: (i) fintech and the submeasures of third-party payment, credit, and insurance have a statistically significant positive effect on China’s economic growth. Specifically, a 10% rise in fintech, third-party payment, credit, and insurance raises China’s economic growth by 8%, 4%, 5%, and 16%, respectively; (ii) the eastern region has the highest growth effect of fintech. Moreover, Zhejiang province has the highest growth effect of fintech at the provincial level; (iii) a unidirectional causality exists from third-party payment and credit to economic growth, and economic growth to insurance; a bidirectional causality exists between fintech and economic growth. This article explicitly suggests substantial institutional reforms to promote the healthy development of fintech in China.
This study investigates the effect of financial structure on renewable energy consumption in G20 countries, further categorized into BRICS, G7, developed, and developing countries. It also examines ...the economic growth channel through which financial structure affects renewable energy consumption and the causality relationships between the two. Using feasible generalized least squares and fixed-effects models, the study finds that financial structure significantly increases renewable energy consumption in all sample groups except BRICS, where it decreases consumption. The study also finds that financial structure indirectly promotes renewable energy consumption through economic growth, with threshold values of economic growth varying by sample group. Specifically, the economic growth threshold beyond which financial structure will impact renewable energy consumption is 8.574 (logarithm) in the full sample, 9.078 (logarithm) in the BRICS, 10.477 (logarithm) in the G7, 10.557 (logarithm) in developed countries, and 8.732 (logarithm) in developing countries. These correspond to $5292 billion in the full sample, $8760 billion in the BRICS, $3,5490 billion in the G7, $3,8446 billion in developed countries, and $6198 billion in developing countries. Finally, the study reveals an uni-directional causality from renewable energy consumption to financial structure in the full sample while the reverse exists in the other sample groups.
•Estimate the impact of financial structure on renewable energy consumption using G20 countries.•Examine the economic growth channel and the causality relationships between the two variables.•Financial structure significantly increases renewable energy consumption.•Financial structure indirectly improves renewable energy consumption via economic growth.•There exists an uni-directional causality from renewable energy consumption to financial structure.
Sub-Saharan Africa (SSA) is one of the least carbon emitter regions in the world; nevertheless, this region is not immune to the effects of climate change. While SSA has not yet fully recovered from ...the socioeconomic effects of the recent coronavirus (COVID-19) pandemic, the crisis in Russia and Ukraine has further affected several SSA nations by driving up already high food prices even higher and limiting people’s access to food. To address these challenges, this study explored the moderating role of financial development (represented by domestic credit) in the climate change (represented by carbon dioxide emissions) and food security (represented by cereal production) nexus using a panel of 27 SSA countries and data ranging from 1990 to 2019. The study applied Lewbel’s two-stage least squares and the outcomes showed that carbon dioxide emissions hamper cereal production in SSA; however, financial development mitigates the negative effects of carbon dioxide emissions on cereal production. The study found that beyond the threshold value of 2.698 financial development will help SSA mitigate the negative impact of carbon dioxide emissions on cereal production. The study proposed the establishment of a proper financial reform to assist the banking industries expand their credit supply to farming communities in a flexible manner to support cereal production in SSA.
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