The effect of digital financial inclusion on the green economy: the case of Egypt

Purpose This paper aims to assess whether digital financial inclusion (DFI) supports Egypt's CO 2 reduction efforts. More specifically, this examines the dynamics between finance, traditional (TFI) and renewable energy on carbon emission in Egypt. Design/methodology/approach The study employed autoregressive distributive lag (ARDL) model for Egypt over period 1990–2020 estimate an extended STIRPAT long-run linkages of DFI, bank-based emissions, along with other control variables. Findings results showed that using services limits emissions long run but not short run, indicating is still its early stage digitalization (DFI < 0.5). Moreover, proved have a significant negative impact implying more investments projects will improve environmental quality. Practical implications findings from help policymakers incorporate DFI policies into climate change adaptation strategies execute better green growth integrate energy-efficient technologies environment. Social Foster economic sustinabaility. Originality/value contributes literature by quantifying two-stage principal component analysis then In addition, extends research environment perspective making it possible excavate deeply relationship draw explicit policy sustainable growth.