Is electronic finance sustainable or not in the European Union? New insights from the panel vector autoregression approach

Abstract

Abstract Today, as a result of the developments and widespread use of information and communication technologies, the weight of online shopping in the economy has increased. The environmental impacts of this new order, which is an important part of electronic fnance, are discussed. In this study, the efect of electronic fnance, economic growth, renewable energy consumption, and urbanization on emissions in EU member countries is examined using the panel vector autoregression (PVAR) approach for the period from 2005 to 2018. The main results suggest that e-fnance has a positive and statistically signifcant efect on CO2 emissions. However, the renewable energy consumption-increasing efect of e-fnance is greater than its emission-reducing efect. Moreover, renewable energy consumption has a statistically insignifcant efect on emissions. Therefore, the contribution of e-fnance on environmental quality weakens. The requirement for EU member countries to prioritize the use of environmentally friendly energy to beneft from the environmental contribution of e-fnance in the most optimal way is stated as the main policy implication of this study