DefinePK

Abstract

Purpose-This study clarifies how financial development, financial technology (fintech), and greenenergy innovation influence the ecological footprint of middleincome countries from 2000 to 2023, thereby illuminating the channels through which economic and technological progress can either undermine or support environmental sustainability. Methodology-Using annual panel data for a wide sample of middleincome economies, the analysis first conducts standard diagnostics that reveal crosssectional dependence, heterogeneous slope behaviour, and longrun cointegration. It then applies MethodofMoments Quantile Regression (MMQR) to estimate effects across the full conditional distribution of ecological footprints (0.10–0.90 quantiles) and validates the results with quantilespecific Wald tests and alternative estimators. Findings-Financial development enlarges ecological footprints between the 0.10 and 0.70 quantiles, while fintech exerts a comparable expansionary influence at every quantile except 0.10. Economic growth intensifies environmental pressure uniformly across all quantiles, underscoring the persistence of growthdriven ecological costs. In contrast, existing greenenergy policies show no statistically significant mitigation of these impacts. Robustness checks confirm the direction of these relationships, although effect sizes vary along the distribution. Novelty-By integrating fintech and greenenergy innovation into an MMQR framework, this work is the first to expose distributionspecific environmental effects of these drivers in middleincome contexts, revealing nuances that conventional meanbased estimators obscure. Implications-Policymakers should link financial and technological expansion to stringent environmental regulation and a carefully managed energy transition, recognizing that the ecological consequences of financial development vary across economies. Tailored, quantilesensitive interventions rather than uniform measures are essential for decoupling economic advancement from environmental degradation and for leveraging fintech and green innovation to achieve genuinely sustainable growth.
Keywords:
Financial Development, Financial Technology, Green Energy Innovation, Ecological Footprint, MMQR