This study examines the impact of natural resource availability, renewable energy, green technology, and green finance on the financial development of North African economies, specifically Egypt, Algeria, Morocco, and Tunisia, from 1999 to 2021. The research uses advanced panel data econometric techniques and a Hausman test to identify the most appropriate model. Results show that green finance has a positive long-term relationship with financial development, underscoring the importance of environmentally focused financial instruments and policies in fostering sustainable developments. However, its short-run effect is not statistically significant, indicating a time lag in translating green finance into tangible financial sector improvements. Green technology has a robust positive influence on financial development across both short- and long-run horizons, highlighting the immediate and sustained benefits of technological innovation in driving financial development. Renewable energy contributes positively to financial development, with significance emerging only in the long run, suggesting that investments in clean energy infrastructure require longer periods to impact financial systems substantially. Natural resource availability shows a significant positive effect only in the short run, reflecting the initial economic stimulus provided by resource exploitation but cautioning against over-reliance on natural resources for long-term financial development. The paper offers pragmatic policy recommendations, including prioritizing strategic investments in green finance mechanisms and technological innovation to catalyze sustainable financial development.

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How Green Finance Innovation Drives Sustainability in North African Countries

  • Ala Fathi Assi,
  • Lydia Iradukunda

摘要

This study examines the impact of natural resource availability, renewable energy, green technology, and green finance on the financial development of North African economies, specifically Egypt, Algeria, Morocco, and Tunisia, from 1999 to 2021. The research uses advanced panel data econometric techniques and a Hausman test to identify the most appropriate model. Results show that green finance has a positive long-term relationship with financial development, underscoring the importance of environmentally focused financial instruments and policies in fostering sustainable developments. However, its short-run effect is not statistically significant, indicating a time lag in translating green finance into tangible financial sector improvements. Green technology has a robust positive influence on financial development across both short- and long-run horizons, highlighting the immediate and sustained benefits of technological innovation in driving financial development. Renewable energy contributes positively to financial development, with significance emerging only in the long run, suggesting that investments in clean energy infrastructure require longer periods to impact financial systems substantially. Natural resource availability shows a significant positive effect only in the short run, reflecting the initial economic stimulus provided by resource exploitation but cautioning against over-reliance on natural resources for long-term financial development. The paper offers pragmatic policy recommendations, including prioritizing strategic investments in green finance mechanisms and technological innovation to catalyze sustainable financial development.