Skip to main content

Advertisement

SpringerLink
Log in

The role of financial inclusion and human capital on the ecological deficit

  • Published:
Environment, Development and Sustainability Aims and scope Submit manuscript

“Humanity is going to require a substantially new way of thinking if it is to survive.”

Albert Einstein.

Abstract

This study explores the effects of financial inclusion, human capital, energy consumption, urbanization, and per capita income on the ecological deficit, using moments quantile regression (MMQR) model with data from 34 OECD countries. In the study, a panel dataset covering the period from 1994 to 2018 is used. According to the MMQR results, both financial inclusion and human capital have a stronger impact on environmental deficit at the higher quantiles (such as energy consumption, population, and per capita income square). In the face of a higher deficit, an increase in financial inclusion increases pollution more, while human capital decreases it.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Data availability

All data are presented in Table 1. The datasets generated during and/or analyzed during the current study are available in these repositories: Global Footprint Network, https://www.footprintnetwork.org/; International Monetary Fund, https://www.imf.org/en/Data; United Nations Development Programme, https://hdr.undp.org/data-center; U.S. Energy Information Administration, https://www.eia.gov/opendata/; and World Bank Data, https://databank.worldbank.org/.

References

  • Ahmad, M., & Wu, Y. (2022). Combined role of green productivity growth, economic globalization, and eco-innovation in achieving ecological sustainability for OECD economies. Journal of Environmental Management, 302, 113980.

    Article  Google Scholar 

  • Ali, K., Jianguo, D., & Kirikkaleli, D. (2022). Modeling the natural resources and financial inclusion on ecological footprint: The role of economic governance institutions. Evidence from ECOWAS Economies. Resources Policy, 79, 103115.

    Google Scholar 

  • Alvarado, R., Tillaguango, B., Dagar, V., Ahmad, M., Işık, C., Méndez, P., & Toledo, E. (2021). Ecological footprint, economic complexity and natural resources rents in Latin America: Empirical evidence using quantile regressions. Journal of Cleaner Production, 318, 128585.

    Article  Google Scholar 

  • Amornthum, S., & Bonham, C. S. (2011). Financial integration in the pacific basin region: RIP by PANIC attack? Journal of International Money and Finance, 30(6), 1019–1033.

    Article  Google Scholar 

  • Apergis, N., & Payne, J. E. (2009). Energy consumption and economic growth in Central America: Evidence from a panel cointegration and error correction model. Energy Economics, 31(2), 211–216.

    Article  Google Scholar 

  • Bai, J., & Ng, S. (2004). A PANIC attack on unit roots and cointegration. Econometrica, 72(4), 1127–1177.

    Article  Google Scholar 

  • Bankston, C. L. (2010). Social justice: Cultural origins of a perspective and a theory. The Independent Review, 15(2), 165–178.

    Google Scholar 

  • Bell, L. A. (2016). Theoretical foundations for social justice education. Teaching for diversity and social justice (pp. 3–26). Routledge.

    Google Scholar 

  • Boon, H. J., Cottrell, A., King, D., Stevenson, R. B., & Millar, J. (2012). Bronfenbrenner’s bioecological theory for modelling community resilience to natural disasters. Natural Hazards, 60, 381–408.

    Article  Google Scholar 

  • Bowles, S., & Gintis, H. (1975). The problem with human capital theory—A Marxian critique. The American Economic Review, 65(2), 74–82.

    Google Scholar 

  • Breitung, J., & Das, S. (2006). Testing for unit roots in panels with a factor structure. Econometric Theory (in press).

  • Bronfenbrenner, U. (1977). Toward an experimental ecology of human development. American Psychologist, 32(7), 513.

    Article  Google Scholar 

  • Bronfenbrenner, U. (1979). The ecology of human development: Experiments by nature and design. Harvard University Press.

    Google Scholar 

  • Bui, D. T. (2020). Transmission channels between financial development and CO2 emissions: A global perspective. Heliyon, 6(11), e05509.

    Article  CAS  Google Scholar 

  • Çakar, N. D., Gedikli, A., Erdoğan, S., & Yıldırım, D. Ç. (2021). Exploring the nexus between human capital and environmental degradation: The case of EU countries. Journal of Environmental Management, 295, 113057.

    Article  Google Scholar 

  • Casanova, L., Cornelius, P. K., & Dutta, S. (2018). Banks, credit constraints, and the financial technology’s evolving role. Financing entrepreneurship and innovation in emerging markets, 161–184.

  • Chang, C. L., & Fang, M. (2022). Renewable energy-led growth hypothesis: New insights from BRICS and N-11 economies. Renewable Energy, 188, 788–800.

    Article  Google Scholar 

  • Danish, Hassan, S. T., Baloch, M. A., Mahmood, N., & Zhang, J. (2019). Linking economic growth and ecological footprint through human capital and biocapacity. Sustainable Cities and Society, 47, 101516.

    Article  Google Scholar 

  • Desha, C., Robinson, D., & Sproul, A. (2015). Working in partnership to develop engineering capability in energy efficiency. Journal of Cleaner Production, 106, 283–291. https://doi.org/10.1016/j.jclepro.2014.03.099

    Article  Google Scholar 

  • Dev, S. M. (2006). Financial inclusion: Issues and challenges. Economic and political weekly, 41(41), 4310–4313.

    Google Scholar 

  • Du, Q., Wu, N., Zhang, F., Lei, Y., & Saeed, A. (2022). Impact of financial inclusion and human capital on environmental quality: Evidence from emerging economies. Environmental Science and Pollution Research, 29(2), 33033–33045.

    Article  Google Scholar 

  • Ehigiamusoe, K. U., Lean, H. H., Babalola, S. J., & Poon, W. C. (2022). The roles of financial development and urbanization in degrading environment in Africa: Unravelling non-linear and moderating impacts. Energy Reports, 8, 1665–1677.

    Article  Google Scholar 

  • Esen, Ö., Yıldırım, D. Ç., & Yıldırım, S. (2020). Threshold effects of economic growth on water stress in the Eurozone. Environmental Science and Pollution Research, 27, 31427–31438. https://doi.org/10.1007/s11356-020-09383-y

    Article  Google Scholar 

  • Esen, Ö., Yıldırım, D. Ç., & Yıldırım, S. (2021). Pollute less or tax more? Asymmetries in the EU environmental taxes–Ecological balance nexus. Environmental Impact Assessment Review, 91, 106662

    Article  Google Scholar 

  • Feitelson, E. (2002). Introducing environmental equity dimensions into the sustainable transport discourse: Issues and pitfalls. Transportation Research Part d: Transport and Environment, 7(2), 99–118.

    Article  Google Scholar 

  • GFN (2019). Global footprint network: advancing the science of sustainability. Natl. Footpr. Biocapacity Accounts. https://www.footprintnetwork.org/resources/data/. Accessed 3 March 2021.

  • Gujarati, G. N. (2016). Introduction to basic econometrics.

  • Hamit-Haggar, M. (2012). Greenhouse gas emissions, energy consumption and economic growth: A panel cointegration analysis from Canadian industrial sector perspective. Energy Economics, 34(1), 358–364.

    Article  Google Scholar 

  • Hart, D. K. (1974). Social equity, justice, and the equitable administrator. Public Administration Review, 34(1), 3–11.

    Article  Google Scholar 

  • Hayek, F. A. (1976). The Mirage of Social Justice. Vol. 2 of Law, legislation and liberty. Routledge.

    Google Scholar 

  • Hertler, S. C., Figueredo, A. J., Peñaherrera-Aguirre, M., & Fernandes, H. B. (2018). Urie Bronfenbrenner: Toward an evolutionary ecological systems theory. Life history evolution: A biological meta-theory for the social sciences (pp. 323–339). Springer.

    Chapter  Google Scholar 

  • Hussain, M., Ye, C., Ye, C., & Wang, Y. (2021). Impact of financial inclusion and infrastructure on ecological footprint in OECD economies. Environmental Science and Pollution Research. https://doi.org/10.1007/s11356-021-17429-y

    Article  Google Scholar 

  • Ibrahim, M., & Vo, X. V. (2021). Exploring the relationships among innovation, financial sector development and environmental pollution in selected industrialized countries. Journal of Environmental Management, 284, 112057.

    Article  Google Scholar 

  • Kapoor, A. (2014). Financial inclusion and the future of the Indian economy. Futures, 56, 35–42.

    Article  Google Scholar 

  • Kara, A., Zhou, H., & Zhou, Y. (2021). Achieving the United Nations’ sustainable development goals through financial inclusion: A systematic literature review of access to finance across the globe. International Review of Financial Analysis, 77, 101833.

    Article  Google Scholar 

  • Khan, I., Hou, F., Zakari, A., Irfan, M., & Ahmad, M. (2022). Links among energy intensity, non-linear financial development, and environmental sustainability: New evidence from Asia Pacific Economic Cooperation countries. Journal of Cleaner Production, 330, 129747.

    Article  Google Scholar 

  • Koh, F., Phoon, K. F., & Ha, C. D. (2018). Digital financial inclusion in Southeast Asia. Handbook of blockchain, digital finance, and inclusion (Vol. 2, pp. 387–403). Academic Press.

    Chapter  Google Scholar 

  • Kose, M. A., Prasad, E., Rogoff, K., & Wei, S. J. (2010). Financial globalization and economic policies. Handbook of development economics (Vol. 5, pp. 4283–4359). Elsevier.

    Chapter  Google Scholar 

  • Langan, J. P. (1977). Rawls, Nozick, and the search for social justice. Theological Studies, 38(2), 346–358.

    Article  Google Scholar 

  • Le, T. H., Le, H. C., & Taghizadeh-Hesary, F. (2020). Does financial inclusion impact CO2 emissions? Evidence from Asia. Finance Research Letters, 34, 101451.

    Article  Google Scholar 

  • Leuenberger, D. Z., & Wakin, M. (2007). Sustainable development in public administration planning: An exploration of social justice, equity, and citizen inclusion. Administrative Theory & Praxis, 29(3), 394–411.

    Article  Google Scholar 

  • Li, N., Pei, X., Huang, Y., Qiao, J., Zhang, Y., & Jamali, R. H. (2022). Impact of financial inclusion and green bond financing for renewable energy mix: implications for financial development in OECD economies. Environmental Science and Pollution Research, 1–12.

  • Lucas, R. E., Jr. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3–42.

    Article  Google Scholar 

  • Marginson, S. (2019). Limitations of human capital theory. Studies in Higher Education, 44(2), 287–301.

    Article  Google Scholar 

  • Moon, H. R., & Perron, B. (2004). Testing for a unit root in panels with dynamic factors. Journal of Econometrics, 122(1), 81–126.

    Article  Google Scholar 

  • Moore, W. E. (1960). A reconsideration of theories of social change. American Sociological Review, 25(6), 810–818.

    Article  Google Scholar 

  • Mulisa, F. (2019). Application of bioecological systems theory to higher education: Best evidence review. Journal of Pedagogical Sociology and Psychology, 1(2), 104–115.

    Google Scholar 

  • Nafukho, F. M., Hairston, N., & Brooks, K. (2004). Human capital theory: Implications for human resource development. Human Resource Development International, 7(4), 545–551.

    Article  Google Scholar 

  • Nozick, R. (1974). Anarchy, state, and utopia. Wiley & Sons.

    Google Scholar 

  • O’Connell, P. G. J. (1998). The overvaluation of purchasing power parity. Journal of International Economics, 44(1), 1–19.

    Article  Google Scholar 

  • Opoku, E. E. O., Dogah, K. E., & Aluko, O. A. (2022). The contribution of human development towards environmental sustainability. Energy Economics, 106, 105782.

    Article  Google Scholar 

  • Ortiz, C., Alvarado, R., Méndez, P., & Flores-Chamba, J. (2022). Environmental impact of the shadow economy, globalisation, and human capital: Capturing spillovers effects using spatial panel data approach. Journal of Environmental Management, 308, 114663.

    Article  CAS  Google Scholar 

  • Ozcan, B., & Bozoklu, S. (2021). Dynamics of ecological balance in OECD countries: Sustainable or unsustainable? Sustainable Production and Consumption, 26, 638–647.

    Article  Google Scholar 

  • Pata, U. K., & Caglar, A. E. (2021). Investigating the EKC hypothesis with renewable energy consumption, human capital, globalization and trade openness for China: Evidence from augmented ARDL approach with a structural break. Energy, 216, 119220.

    Article  Google Scholar 

  • Patwardhan, A. (2018). Financial inclusion in the digital age. Handbook of Blockchain, Digital Finance, and Inclusion (Vol. 1, pp. 57–89). Academic Press.

    Chapter  Google Scholar 

  • Pedroni, P. (1999). Critical values for cointegration tests in heterogeneous panels with multiple regressors. Oxford Bulletin of Economics and Statistics, 61, 653–670.

    Article  Google Scholar 

  • Pedroni, P. (2004). Panel cointegration: Asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis: New results. Econometric Theory, 20, 597–627.

    Article  Google Scholar 

  • Pesaran, M.H., (2004). General diagnostic tests for cross section dependence in panels. Cambridge Work. Pap. Econ. 435.

  • Pesaran, M.H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265–312.

    Article  Google Scholar 

  • Qin, L., Hou, Y., Miao, X., Zhang, X., Rahim, S., & Kirikkaleli, D. (2021). Revisiting financial development and renewable energy electricity role in attaining China’s carbon neutrality target. Journal of Environmental Management, 297, 113335.

    Article  Google Scholar 

  • Rawls, A. (1971). Theories of social justice. 

  • Rehman, M. A., Fareed, Z., & Shahzad, F. (2022). When would the dark clouds of financial inclusion be over, and the environment becomes clean? The role of national governance. Environmental Science and Pollution Research, 29(16), 27651–27663.

    Article  Google Scholar 

  • Renzhi, N., & Baek, Y. J. (2020). Can financial inclusion be an effective mitigation measure? Evidence from panel data analysis of the environmental Kuznets curve. Finance Research Letters, 37, 101725.

    Article  Google Scholar 

  • Salari, T. E., Meidani, A. A. N., Koshalshahi, Z. S., & Ayask, A. A. A. (2022). The threshold effect of HDI on the relationship between financial development and oil revenues. Resources Policy, 76, 102537.

    Article  Google Scholar 

  • Saud, S., Chen, S., & Haseeb, A. (2020). The role of financial development and globalization in the environment: Accounting ecological footprint indicators for selected one-belt-one-road initiative countries. Journal of Cleaner Production, 250, 119518.

    Article  Google Scholar 

  • Schultz, T. W. (1960). Capital Formation by Education. Journal of Political Economy, 68, 571–583.

    Article  Google Scholar 

  • Shahbaz, M., Li, J., Dong, X., & Dong, K. (2022). How financial inclusion affects the collaborative reduction of pollutant and carbon emissions: The case of China. Energy Economics, 107, 105847.

    Article  Google Scholar 

  • Shove, E. (2010). Social theory and climate change. Theory, Culture & Society, 27(2–3), 277–288.

    Article  Google Scholar 

  • Sincero, M. (2012). Ecological Systems Theory. Retrieved Jun 17, 2019 from Explorable.com: https://explorable.com/ecological-systems-theory

  • Siregar, I. (2022). The relationship between conflict and social change in the perspective of expert theory: A literature review. International Journal of Arts and Humanities Studies, 2(1), 09–16.

    Article  Google Scholar 

  • Sweetland, S. R. (1996). Human capital theory: Foundations of a field of inquiry. Review of Educational Research, 66(3), 341–359.

    Article  Google Scholar 

  • Sun, Y., Bao, Q., Siao-Yun, W., & ul Islam, M., & Razzaq, A. (2022). Renewable energy transition and environmental sustainability through economic complexity in BRICS countries: fresh insights from novel Method of Moments Quantile regression. Renewable Energy, 184, 1165–1176.

    Article  Google Scholar 

  • Sztompka, P. (1993). The sociology of social change.

  • Tyler, T. R. (2000). Social justice: Outcome and procedure. International Journal of Psychology, 35(2), 117–125.

    Article  Google Scholar 

  • Tyler, T., Boeckmann, R. J., Smith, H. J., & Huo, Y. J. (2019). Social justice in a diverse society. Routledge.

    Book  Google Scholar 

  • Usman, M., Makhdum, M. S. A., & Kousar, R. (2021). Does financial inclusion, renewable and non-renewable energy utilization accelerate ecological footprints and economic growth? Fresh evidence from 15 highest emitting countries. Sustainable Cities and Society, 65, 102590.

    Article  Google Scholar 

  • Usman, M., Balsalobre-Lorente, D., Jahanger, A., & Ahmad, P. (2022). Pollution concern during globalization mode in financially resource-rich countries: Do financial development, natural resources, and renewable energy consumption matter? Renewable Energy, 183, 90–102.

    Article  Google Scholar 

  • Valls Martínez, M. D. C., Cruz Rambaud, S., & Abad Segura, E. (2018). Savings operations over random periods. Cogent Business & Management, 5(1), 1515572.

    Article  Google Scholar 

  • Wackernagel, M., & Rees, W. E. (1996). Our Ecological foot- print: Reducing human impact on the Earth. Gabriola Press New Society Publishing.

    Google Scholar 

  • Westerlund, J. (2005). New simple tests for panel cointegration. Econometric Reviews, 24(3), 297–316.

    Article  Google Scholar 

  • Westerlund, J. (2015). The power of PANIC. Journal of Econometrics, 185(2), 495–509.

    Article  Google Scholar 

  • Williams, S., & Doyon, A. (2019). Justice in energy transitions. Environmental Innovation and Societal Transitions, 31, 144–153.

    Article  Google Scholar 

  • World Bank. (2018). Financial inclusion. Retrieved on November 26, 2019. Available at: https://www.worldbank.org/en/topic/financialinclusion/overview#1

  • Yang, X., Li, N., Mu, H., Zhang, M., Pang, J., & Ahmad, M. (2021). Study on the long-term and short-term effects of globalization and population aging on ecological footprint in OECD countries. Ecological Complexity, 47, 100946.

    Article  Google Scholar 

  • Yao, Y., Ivanovski, K., Inekwe, J., & Smyth, R. (2020). Human capital and CO2 emissions in the long run. Energy Economics, 91, 104907.

    Article  Google Scholar 

  • Yıldırım, D. Ç., Yıldırım, S., Erdoğan, S., Demirtaş, I., Couto, G., & Castanho, R. A. (2021). Time-varying convergences of environmental footprint levels between European countries. Energies., 14(7), 1813. https://doi.org/10.3390/en14071813

    Article  Google Scholar 

  • Yıldırım, S., Yıldırım, D. Ç., Aydın, K., et al. (2021b). Regime-dependent effect of tourism on carbon emissions in the Mediterranean countries. Environmental Science and Pollution Research, 28, 54766–54780. https://doi.org/10.1007/s11356-021-14391-7

    Article  CAS  Google Scholar 

  • Yıldırım, D. Ç., Yıldırım, S., Bostancı, S. H., & Turan, T. (2022). The nexus between human development and fishing footprint among mediterranean countries. Marine Pollution Bulletin, 176, 113426.

    Article  Google Scholar 

  • Yildirim, S. (2023). Greenwashing: a rapid escape from sustainability or a slow transition? LBS Journal of Management & Research. https://doi.org/10.1108/LBSJMR-11-2022-0077

    Article  Google Scholar 

  • Yıldırım, S. & Yıldırım, D. Ç. (2020). Achieving Sustainable Development Through a Green Economy Approach. In S. Patti & G. Trizzino (Eds.), Advanced Integrated Approaches to Environmental Economics and Policy: Emerging Research and Opportunities (pp. 1–22). IGI Global. https://doi.org/10.4018/978-1-5225-9562-5.ch001

  • Zafar, M. W., Zaidi, S. A. H., Khan, N. R., Mirza, F. M., Hou, F., & Kirmani, S. A. A. (2019). The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: The case of the United States. Resources Policy, 63, 101428.

    Article  Google Scholar 

  • Zaidi, S. A. H., Hussain, M., & Zaman, Q. U. (2021). Dynamic linkages between financial inclusion and carbon emissions: Evidence from selected OECD countries. Resources, Environment and Sustainability, 4, 100022.

    Article  Google Scholar 

  • Zhang, L., Godil, D. I., Bibi, M., Khan, M. K., Sarwat, S., & Anser, M. K. (2021). Caring for the environment: How human capital, natural resources, and economic growth interact with environmental degradation in Pakistan? A dynamic ARDL approach. Science of the Total Environment, 774, 145553.

    Article  CAS  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Tekirdağ Namık Kemal University, Tekirdağ, Turkey

    Durmuş Çağrı Yıldırım & Tuğba Turan

  2. Department of Economics, Giresun University, Giresun, Turkey

    Işıl Demirtaş

  3. Department of Business and Administration, Tekirdağ Namık Kemal University, Tekirdağ, Turkey

    Seda Yıldırım

Authors
  1. Durmuş Çağrı Yıldırım
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Işıl Demirtaş
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Seda Yıldırım
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Tuğba Turan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Durmuş Çağrı Yıldırım.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

See Table

Table 9 List of sample countries (OECD)
Full size table

9.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Yıldırım, D.Ç., Demirtaş, I., Yıldırım, S. et al. The role of financial inclusion and human capital on the ecological deficit. Environ Dev Sustain (2023). https://doi.org/10.1007/s10668-023-04181-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s10668-023-04181-1

Keywords

Search

Navigation