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Linking financial development, economic growth, and ecological footprint: what is the role of technological innovation?

DOI:10.1007/s11356-021-14993-1
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Shauku Starford Kihombo at Beijing Institute of Technology
Shauku Starford Kihombo
Zahoor Ahmed at Cyprus International University
Zahoor Ahmed
Songsheng Chen
Songsheng Chen
Tomiwa Sunday Adebayo at Cyprus International University
Tomiwa Sunday Adebayo
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Abstract and Figures

The literature analyzing the ecological impacts of financial development (FD) documents mixed results. In addition, very limited researches consider the role of technological innovation in ecological sustainability even though technological innovation is indispensable to achieve technological advancement, which may help in sustainable development and ecological sustainability. Therefore, this work probes the effects of technological innovation, financial development, and economic growth (GDP) on the ecological footprint (EF) controlling urbanization and employing a STIRPAT framework. The analysis of data from West Asia and Middle East nations from 1990 to 2017 revealed cointegration in the model. The long-run coefficients produced by the continuously updated fully modified technique revealed that a 1% upsurge in technological innovation decreases EF by 0.010%. Interestingly, technological innovation is helpful to decrease EF and enhance economic growth in the West Asia and Middle East (WAME) countries. However, a 1% rise in FD boosts the level of EF by 0.0016% inferring that FD stimulates ecological degradation. Likewise, urbanization in the WAME countries raises EF levels and contributes adversely to ecological quality. In addition to this, the study revealed the environmental Kuznets curve hypothesis in the selected countries accounting for technological innovation, FD, and urbanization in the model. The causal analysis provided evidence of unidirectional causality from FD to EF and bidirectional causality between technological innovation and EF. The study recommends more investment in research and development and strong collaboration between the universities and industries to promote the level of technological innovation for both sustainable development and ecological sustainability. In addition, urban sustainability policies are necessary without decreasing the urbanization level.
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RESEARCH ARTICLE
Linking financial development, economic growth, and ecological
footprint: what is the role of technological innovation?
Shauku Kihombo
1
&Zahoor Ahmed
1
&Songsheng Chen
1
&Tomiwa Sunday Adebayo
2
&Dervis Kirikkaleli
3
Received: 20 May 2021 /Accepted: 15 June 2021
#The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature 2021
Abstract
The literature analyzing the ecological impacts of financial development (FD) documents mixed results. In addition, very limited
researches consider the role of technological innovation in ecological sustainability even though technological innovation is
indispensable to achieve technological advancement, which may help in sustainable development and ecological sustainability.
Therefore, this work probes the effects of technological innovation, financial development, and economic growth (GDP) on the
ecological footprint (EF) controlling urbanization and employing a STIRPAT framework. The analysis of data from West Asia
and Middle East nations from 1990 to 2017 revealed cointegration in the model. The long-run coefficients produced by the
continuously updated fully modified technique revealed that a 1% upsurge in technological innovation decreases EF by 0.010%.
Interestingly, technological innovation is helpful to decrease EF and enhance economic growth in the West Asia and Middle East
(WAME) countries. However, a 1% rise in FD boosts the level of EF by 0.0016% inferring that FD stimulates ecological
degradation. Likewise, urbanization in the WAME countries raises EF levels and contributes adversely to ecological quality.
In addition to this, the study revealed the environmental Kuznets curve hypothesis in the selected countries accounting for
technological innovation, FD, and urbanization in the model. The causal analysis provided evidence of unidirectional causality
from FD to EF and bidirectional causality between technological innovation and EF. The study recommends more investment in
research and development and strong collaboration between the universities and industries to promote the level of technological
innovationfor both sustainable development and ecological sustainability. In addition, urban sustainability policies are necessary
without decreasing the urbanization level.
Keywords Technological innovation .Ecological footprint .Financial development .Economic growth .Urbanization
Introduction
The steady increase in the environmental footprints of coun-
tries around the world has made it highly difficult to
accomplish the goal of sustainable development. Ecological
footprint (EF) which gauges the repercussions of anthropo-
genic activities in terms of waste generation and resource con-
sumption is continuously growing against the productive
Responsible Editor: Nicholas Apergis
*Songsheng Chen
chenss@bit.edu.cn
*Tomiwa Sunday Adebayo
twaikline@gmail.com
Shauku Kihombo
skihombo@gmail.com
Zahoor Ahmed
Zahoorahmed83@yahoo.com
Dervis Kirikkaleli
dkirikkaleli@eul.edu.tr
1
School of Management and Economics, Beijing Institute of
Technology, South-Zhongguancun Street, Beijing 100081, People’s
Republic of China
2
Faculty of Economics and Administrative Science, Department of
Business Administration, Cyprus International University, Nicosia,
Northern Cyprus, TR-10 Mersin, Turkey
3
Faculty of Economics and Administrative Sciences, Department of
Banking and Finance, European University of Lefke, Lefke,
Northern Cyprus, TR-10 Mersin, Turkey
https://doi.org/10.1007/s11356-021-14993-1
/ Published online: 25 June 2021
Environmental Science and Pollution Research (2021) 28:61235–61245
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
... To address the ongoing environmental crises, the production of green electricity is essential, and generation of green electricity requires technological innovation (Xue et al., 2022). Innovation not only stimulates the production of green electricity but also facilitates energy efficiency, which reduces the burning of coal, gas, and oil (Kihombo et al., 2021). Thus, the innovation-led clean electricity can help in overcoming the ecological imbalance and help in attaining the SDG 13 objectives. ...
... The work of Wasif et al. (2021) found that GR is responsible for expanding emissions, while TEI curbs pollution in APEC nations. Similarly, the study of Kihombo et al. (2021) indicated that current growth levels lead to adverse ecological consequences, while TEI helps reduce emissions in WAME country groups. Khan et al. (2020) established that green energy and TEI dampen CO 2 emissions, while GR increases environmental degradation. ...
... In this context, the significant coefficient (− 0.036) of TEI in Table 6 provides that the growing EF of ASEAN can be mitigated by enhancing TEI in member countries. This result matches the previous findings of Zhao et al. (2021) for the world, Adebayo et al. (2022a) for Portugal, Mensah et al. (2018) for the OECD, Kihombo et al. (2021) for WAME nations, and Tang et al. (2022) for the BRICS. Although these findings are at odds with Sinha et al. (2020) for emerging countries, a reduction in the EF due to a rise in TEI makes sense because innovation is useful in developing advanced energy-efficient technologies and renewable electricity technologies, which in turn can limit energy usage, ecological degradation, and the EF of nations. ...
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... Ensuring environmental sustainability has recently become a worldwide concern. For decades, innovation has been seen as a key tool for addressing environmental concerns [21]. Due to its intimate relationship with a nation's economic, social, political, and economic concerns. ...
... On the other hand, [24] found that TI decreases CO 2 in developing countries. Similarly, the studies of [25] and [21] reported that TI decreases emissions. In addition to the conflicting results, there are only a few empirical investigations on the interaction between TI and CO 2 . ...
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... Using the ARDL analysis in Venezuela using "data from 1971 to 2013," Li et al. (2022a) analyzed the association between oil price shocks and other macroeconomic antecedents on CO 2 emission. Their results evidenced that increased shocks in oil prices generate CO 2 emissions, like the studies of Ke et al. (2021) and Kihombo et al. (2021). ...
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... The interaction between technological innovation, the financial market, and the real economy has been a hot research topic in academic circles in recent years. Scholars have published papers about the impact of scientific and technological finance on economic development, and most of them believe that the use of industry-finance data or industry stock indices can roughly reflect the relevant performance between industries [10][11][12]. Dagar et al. constructed the technological-innovation-development index and used the GMM two-step test to draw the conclusion that technological innovation has a significant role in promoting the upgrading of industrial structure and can promote economic growth [13]. Qi and Li analyzed the stock-price data of listed companies in the manufacturing industry, summarized the dependency between the real economy and financial technology, and found that the various industries and technology companies in the real economy were greatly affected by the stock-price fluctuations of AI, blockchain, and large data-technology companies in financial technology, showing a positive correlation [14]. ...
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Research on Calculation Method of Steam Absorption in Steam Injection Thermal Recovery Technology
Article
The world's heavy oil resources are very rich, and its geological reserves far exceed conventional crude oil reserves. Steam injection thermal recovery technology is widely used in heavy oil fields around the world, and steam absorption calculation is an important part of steam injection thermal recovery technology. In this paper, the test principle of the high-temperature five-parameter steam absorption profile tester is introduced in detail, and a calculation model for reservoir steam absorption is constructed. Finally, the wells in Kazakhstan have been used for calculation of steam absorption, and the interpretation results have been compared with actual production. The research results show that as the pipeline grows, the heat loss gradually increases, and the dryness decreases to a large extent. When it reaches the wellhead, the dryness is only 57%. This is mainly due to the serious heat loss caused by the excessively long pipeline, which has a great influence on the steam injection effect. The calculation error of the vapor absorption percentage of the oil layer is within 5%, and the calculation result of the vapor absorption percentage is consistent with the on-site interpretation result. The interpretation conclusion verifies the reliability of the method in this paper.
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An environmental impact assessment of economic complexity and energy consumption: Does institutional quality make a difference?
Article
The relationship between ecological footprint and economic complexity has important policy implications for environmental sustainability. Furthermore, institutional quality can be an imperative tool to ensure environmental sustainability, and it may also moderate the nexus between economic complexity and ecological footprint. Therefore, this study investigates the linkage between economic complexity, institutional quality, disaggregated energy consumption, and economic growth on environmental degradation in emerging countries from 1984 to 2017. In addition, it also probes the moderating effect of institutional quality in the nexus between economic complexity and footprint. To do so, the study applies an advanced econometric approach, cross-sectional autoregressive distributed lags (CS-ARDL) estimator, for short-run and long-run estimation, that allows heterogeneity in the slope parameters and dependencies across countries. The analytical outcomes demonstrate that economic complexity increases environmental degradation by exacerbating ecological footprint, while a high level of economic complexity mitigates ecological footprint. The findings of the study unfold that institutional quality supports environmental sustainability by reducing the ecological footprint. The outcomes also indicated that institutional quality promotes environmental sustainability by moderating the nexus between economic complexity and ecological degradation. Moreover, renewable energy is found to decrease ecological footprint, whereas non-renewable energy use leads to intensifying the ecological footprint. It was also found that there is an inverted u-shaped association between ecological footprint and economic growth. Based on the results, the study suggests that emerging countries should accelerate economic complexity along with a stronger institutional framework to combat environmental issues without compromising sustainable economic growth.
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A dissipative structure theory-based investigation of a construction and demolition waste minimization system in China
Article
  • Apr 2021
Construction and demolition (C&D) waste minimization is an important strategy for addressing waste management challenges. Generally, C&D waste minimization is a complex and open system involving various interrelated processes, elements and stakeholders. Previous studies have investigated internal factors of the system, but neglected effects of external factors and interactions between internal and external factors. Therefore, this paper aims to investigate China’s C&D waste minimization system from the perspectives of integrity and dynamics. Based on the dissipative structure theory, the paper examines whether China’s C&D waste minimization system is a dissipative structure, given that a dissipative structure system can transform itself from disordered state to ordered state spontaneously through interactions among the inherent subsystems and elements involved. Firstly, 28 factors influencing waste minimization are identified. Secondly, the Brusselator model and entropy methods are adopted for empirical analysis with the data collected by questionnaire survey. The findings reveal that China’s current C&D waste minimization system is not a dissipative structure; consequently, the development of the system cannot form a macroscopic stable and orderly structure through self-organization. Accordingly, suggestions are proposed to effectively promote the C&D waste minimization system toward a dissipative structure. The findings are expected to enhance the C&D waste minimization system through forming a dissipative structure and consequently achieving orderly and coordinated system development.
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