EXPLORING THE IMPACT OF FINANCIAL DEVELOPMENT, FINANCIAL INCLUSION AND RENEWABLE ENERGY ON SUSTAINABLE DEVELOPMENT: THE LEADING ROLE OF FINTECH IN TURKIYE

Abstract

Financial systems can support sustainable development by promoting investments considering environmental and social impacts, developing green finance, and ensuring financial inclusion. Incorporating financial technology into financial services can also help increase sustainable investment and financial inclusion. Therefore, a study was conducted to investigate the effect of financial development and financial inclusion, FinTech, renewable energy, and economic growth on the ecological footprint of Turkiye from 2005 to 2023 using the ARDL method. The study also focused on the non-linear effect of financial development on ecological footprint and the moderating role of FinTech in the relationship between financial development and ecological footprint. The study revealed an inverted U-shaped relationship between financial development and ecological footprint in the long run. Additionally, in the long run, FinTech and economic growth increase environmental degradation, while financial inclusion and renewable energy decrease environmental degradation. In the short run, no significant relationship was found between financial development, renewable energy, and environmental degradation. On the other hand, FinTech and financial inclusion are found to decrease environmental degradation, while economic growth is found to increase environmental degradation. The results suggest that Turkiye needs to consider the targets of SDG7 (Affordable and Clean Energy), SDG8 (Decent Work and Economic Growth), and SDG17 (Partnerships for the Goals), as well as interactive policies, to achieve the targets of SDG13 (Climate Action).