UNVEILING THE EFFECT OF DIGITAL FINANCIAL INCLUSION ON ENVIRONMENTAL DEGRADATION IN ASIAN ECONOMIES UNDER LCC HYPOTHESIS
Main Article Content
Abstract
Purpose: Digital financial inclusion (DFI) is a vital element for a country's growth and progress. Access to digital financial services not only enhances individuals' capacity to contribute to economic activities, but it also has the likely to contribute to environmental degradation. The main aim of this study is to scrutinise the role of DFI in environmental degradation in selected Asian nations within the framework of the LCC hypothesis.
Design/Methodology: The research study used annual secondary data collected from various sources, including the WDI website from 2017–2023. The dependent variable is environmental degradation, which is proxied by consumer-based carbon dioxide emissions. Likewise, for the independent variable, DFI, the study used the availability dimension (automated teller machines (ATMs) per 100,000 adults) and usage dimensions (number of depositors with financial institutions per 1000 adults and number of mobile money transactions per 1,000 adults), respectively. The study applied panel quantile regression along with some pre-requisite diagnostic tests.
Findings: The findings of the study showed that there is a significant relationship between DFI and environmental degradation. Likewise, the study also confirms the presence of the Load Capacity Curve (LCC) hypothesis for selected Asian economies.
Implications: The study holds significant implications for countries, encouraging them to enhance their inclusive energy efficiency, boost economic activity, and devise strategies to mitigate environmental degradation. Therefore, it is suggested that countries may use advanced technologies in order to improve environmental practices, which will later in the long run help them to mitigate GHG emissions and increases environmental sustainability.
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