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September 28, 2025Sustainability4 citationsOpen Access

Smart Growth or Footprint Trap? A Quantile Approach to FinTech, Natural Resources, and Governance in Emerging Markets

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JYJun YinDEDaniel Edward

Key Points

  • Strong governance significantly reduces environmental impacts from fintech and natural resource rents, especially under higher ecological footprints.
  • Quantile regression analysis shows that natural resource rents and fintech increase ecological footprints, more so in economies under severe ecological stress.
  • Dumitrescu–Hurlin tests reveal unidirectional causality from natural resource rents and economic growth to ecological footprints, highlighting their interconnectedness.
  • The study underscores the importance of robust governance to promote sustainable growth amidst the rising ecological pressures related to fintech and resource exploitation.

Abstract

Amid rapid industrialization and the growing integration of financial technologies, emerging economies face increasing pressure from rising ecological footprints (ECOF). This study examines the environmental impacts of natural resource rents (NRES) and digital financial technology (DFIN), emphasizing the moderating role of governance (INST), using data from the top 10 emerging economies between 1995 and 2023. The Method of Moments Quantile Regression (MMQR) approach is employed to capture heterogeneous effects across different levels of environmental stress. The results reveal that both NRES and DFIN exacerbate ECOF, particularly in economies facing higher ecological pressures. However, strong governance significantly reduces these adverse effects, especially at higher ECOF quantiles, highlighting its pivotal role in aligning resource management and digital innovation with environmental sustainability goals. Interaction terms further confirm that effective institutional quality can buffer the ecological risks associated with resource exploitation and FinTech expansion. Additionally, Dumitrescu–Hurlin panel causality tests reveal a unidirectional causality from NRES and economic growth (EGRO) to ECOF, while bidirectional relationships are observed between DFIN, INST, education, urbanization, renewable energy, and ECOF. These findings underscore the complex interlinkages between economic growth, technological advancement, and institutional frameworks. In the context of post-COP28 climate commitments and Sustainable Development Goals, this study provides timely policy recommendations to promote sustainable growth through robust governance, responsible resource utilization, and balanced FinTech integration.

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Cite This Study

Yin et al. (2025) studied this question.

synapsesocial.com/papers/68d9051b41e1c178a14f4f0ahttps://doi.org/10.3390/su17198673
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