Abstract Climate change and environmental degradation pose significant challenges to global sustainability, necessitating innovative approaches to economic and financial practices. While green finance and eco-innovation have emerged as potential solutions to mitigate ecological degradation, there is a notable gap in the literature regarding their efficacy in addressing the “resource curse” phenomenon. This study aims to bridge this gap by exploring the impacts of green finance, eco-innovation, and natural resources on the ecological footprint of 20 OECD countries from 1990 to 2020. Additionally, this study examines the moderating role of green finance and eco-innovation in the relationship between natural resources and the ecological footprint. To achieve this objective, the study employed a comprehensive methodological framework, including the method of moments quantile regression and machine learning techniques. The results revealed that natural resources exacerbate environmental degradation, which validates the “resource curse” hypothesis. Green finance is negatively and significantly related to the ecological footprint across all quantiles. The interaction term of green finance and natural resources shows a significant and positive association with the ecological footprint at the lower quantiles, whereas at the upper quantile, the coefficient value becomes negative but statistically insignificant. Eco-innovation fosters environmental sustainability across all quantiles, with a more pronounced effect observed in the upper quantiles. Eco-innovation significantly moderates the association between natural resources and the ecological footprint, indicating that eco-innovation can be a viable tool for curing the resource curse. The robustness test further validates these results. The study recommends that governments prioritize the development and implementation of comprehensive green finance frameworks to direct investments in environmentally sustainable projects, promote eco-innovation, and ensure the sustainable use of natural resources.
Ahmad et al. (Mon,) studied this question.