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Do technological innovation and financial development determine environmental quality? Empirical evidence from Arab countries

Mosab I. Tabash et al.

Review of Accounting and Finance2025https://doi.org/10.1108/raf-02-2024-0050article
AJG 2ABDC B
Weight
0.64

What the paper says

Purpose The Arab countries have numerous environmental problems, including massive emissions of carbon dioxide, climate change and increasingly high temperatures. Many prior studies have explored the various determinants of environmental quality. However, few papers offer adequate empirical evidence on the role of technological innovation and financial development in determining environmental quality. To fill this gap, this study aims to investigate the impact of technological innovation and financial development on CO 2 emissions, controlling for several factors. Design/methodology/approach The study sample data cover 10 Arab countries over a 30-year period. Because of the existence of non-stationarity and cointegration, the authors use dynamic ordinary least squares and fully modified ordinary least squares models to perform regressions among the variables. Findings The statistical results reveal that technological innovation and financial development both negatively determine CO 2 , which implies that both factors ensure environmental quality in this region. A developed financial sector facilitates access to funds for technological innovation and thus enables the adoption of cleaner production technologies and renewable energy sources. Both factors reduce environmental degradation. In addition, advanced financial systems incentivize investment in ecofriendly projects and promote sustainable practices, fostering a conducive environment for improving environmental quality. The empirical analysis then reveals the pollution halo effect of foreign direct investment inflow. Research limitations/implications Based on the empirical findings, the authors recommend increasing investment in research and development activities and pay more attention to improvement of the financial sector. Both factors can enhance environmental sustainability in Arab countries. Originality/value This study provides robustness for prior analyses and adds to the literature by widening the coverage to include Arab countries.

18 citations

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https://doi.org/https://doi.org/10.1108/raf-02-2024-0050

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@article{mosab2025,
  title        = {{Do technological innovation and financial development determine environmental quality? Empirical evidence from Arab countries}},
  author       = {Mosab I. Tabash et al.},
  journal      = {Review of Accounting and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1108/raf-02-2024-0050},
}

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Do technological innovation and financial development determine environmental quality? Empirical evidence from Arab countries

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Evidence weight

0.64

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.67 × 0.4 = 0.27
M · momentum0.95 × 0.15 = 0.14
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.