Unveiling the Nexus: Energy Innovation, Fintech, Environmental Taxes, and Natural Resources

Abstract

This study explores the intricate interplay between econsomic development and environmental well-being within the East Asian context. Despite the region's robust economic performance, it grapples with significant environmental challenges, including pollution, waste management issues, and deforestation. Our investigation focuses on assessing the impact of energy innovation, financial technology (Fintech) revenue, environmentally related taxes, and natural resource rents on environmental sustainability. Employing cointegration and autoregressive distributed lag (ARDL) estimation methodologies, our analysis indicates that energy innovation, environmentally related taxes, and Fintech revenue positively and significantly influence environmental sustainability. However, natural resource rents exhibit a negative effect. Furthermore, we observe bidirectional causality between environmental sustainability and both energy innovation and Fintech revenue, suggesting a mutually reinforcing relationship. Conversely, the relationship between environmental sustainability and GDP growth, natural resource rents, and environmentally related taxes appears unidirectional. These findings underscore the necessity of adopting a holistic approach. East Asian nations should adeptly manage their natural resource endowments, harness Fintech for sustainable initiatives, and sustain investments in clean energy innovation. By embracing these strategies, East Asia can chart a course towards a sustainable future, simultaneously propelling economic progress and fostering a healthier global environment.