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Sustainable energy for all: the link between financial inclusion, renewable energy and environmental sustainability in developing economies

Josephine Ofosu-Mensah Ababio (Faculty of Accounting and Finance, University of Professional Studies, Accra, Ghana)
Eric B. Yiadom (Faculty of Accounting and Finance, University of Professional Studies, Accra, Ghana)
John K.M. Mawutor (Faculty of Accounting and Finance, University of Professional Studies, Accra, Ghana)
Joseph K. Tuffour (Faculty of Accounting and Finance, University of Professional Studies, Accra, Ghana)
Edward Attah‐Botchwey (Faculty of Accounting and Finance, University of Professional Studies, Accra, Ghana)

International Journal of Energy Sector Management

ISSN: 1750-6220

Article publication date: 14 September 2023

Issue publication date: 15 July 2024

197

Abstract

Purpose

This study aims to use 67 developing countries to examine the role of financial inclusion as an “empowering tool” for renewable energy uptake and to improve environmental sustainability in developing countries.

Design/methodology/approach

Using a battery of econometric models, including the generalized method of moment-panel vector autoregression (GMM-PVAR), impulse response function, Granger causality, fully modified ordinary least squares and dynamic ordinary least squares, the study proposed and tested three hypotheses.

Findings

The results from various estimations indicate that financial inclusion has a positive effect on renewable energy consumption and environmental sustainability improvement in developing countries. The findings suggest that financial inclusion can improve environmental sustainability by increasing access to financing to fund renewable energy projects, support sustainable businesses and promote sustainable practices.

Originality/value

This study suggests that policymakers prioritize financial inclusion to promote renewable energy consumption and environmental sustainability. Policies should enhance access to financial services, offer financial incentives and subsidies, provide affordable loans through microfinance institutions and fintech companies and promote sustainable businesses and green technologies.

Keywords

Acknowledgements

Data availability statement: Data is available upon a reasonable request to the corresponding author.

Conflict of Interest Statement: The authors have no relevant financial or non-financial conflict of interest to disclose.

Citation

Ofosu-Mensah Ababio, J., Yiadom, E.B., Mawutor, J.K.M., Tuffour, J.K. and Attah‐Botchwey, E. (2024), "Sustainable energy for all: the link between financial inclusion, renewable energy and environmental sustainability in developing economies", International Journal of Energy Sector Management, Vol. 18 No. 5, pp. 1088-1108. https://doi.org/10.1108/IJESM-07-2023-0012

Publisher

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Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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