Technological innovation, natural resources, financial inclusion, and environmental degradation in BRI economies

Abstract

This research aimed to examine the relationship between financial inclusion (FNI), technological innovation (TIN), and natural resources (NRS) and their impact on environmental degradation in the 45‐belt and road initiative (BRI) region from 2001 to 2018. The study utilized advanced econometric techniques, including the generalized method of moments–panel vector autoregressive, as well as traditional methods such as ordinary least squares and dynamic ordinary least squares, to examine the relationship between these factors and environmental degradation, measured by carbon footprint (CFP) and ecological footprint (EFP). The long‐run estimate confirms that NRS and FNI appear to have led to higher regional CFPs and EFP pressure. Meanwhile, the relationship with TIN, economic governance institutions (government effectiveness and regularity quality), and human capital contribute to overcoming environmental degradation and increasing environmental sustainability. The findings of this study have important implications for policymakers and central authorities in the BRI region to address environmental degradation and promote sustainable development.