Impact of financial inclusion and infrastructure on ecological footprint in OECD economies

Financial inclusion (FI) is the backbone for every economy; however, a sustainable environment is also inevitable. Therefore, this study investigates the nexus of FI and environment, i.e., ecological footprint (EF) by controlling energy consumption (EC), economic growth (Y), infrastructure (INF), and corruption (CR) in OECD countries from 2004 to 2017. To validate this nexus, the study builds an index of FI and infrastructure through Principal Component Analysis (PCA). Furthermore, to estimate the above-said nexus, the study uses the augmented mean group (AMG), and common correlated effects mean group (CCE-MG) techniques to produce reliable results. Findings report the supportive role of INF by indicating the need to promote INF to attain a sustainable environment. However, FI, EC, and CR are found to be prominent reasons for environmental degradation. The study has robust policy implications for OECD economies.

Automated summary

The study highlights the vital role of infrastructure in promoting a sustainable environment, while pointing out financial inclusion, energy consumption, and corruption as major reasons for environmental degradation.