The Synergistic Impact of Digital Technology and Financial Systems on Sustainable Environment

ABSTRACT This paper exclusively adds value to the state‐of‐the‐art literature, offering the combined impact of various conditions (variables) on environmental sustainability in the context of complexity theory. Unlike the conventional regression‐based research methods, the fuzzy set qualitative comparative analysis applies a novel configuration approach for analysing the data of 63 countries around the globe covering the period from 1990 to 2020. In addition, analytical induction is also used to diagnose existing patterns of solutions in the dataset. The input conditions are digital transformation, financial innovation, financial inclusion, foreign direct investment, and financial openness, while the outcome condition (variable) is an environmental sustainability. The necessary condition analysis shows no individual conditions indispensable for the outcome. However, sufficiency condition analysis discovers eight alternative solutions/ pathways, sufficient for the outcome. This study makes notable contributions to the existing body of knowledge that offers unique long‐term insights and practical solutions for academicians and policymakers working on sustainable environments worldwide, in particular.