The drivers of energy efficiency in emerging economies: do financial inclusion, fintech and foreign direct investment matter?

The study examines the impact of financial inclusion, fintech and foreign direct investment (FDI) on energy efficiency during 2004–2022 for ten emerging economies which include Brazil, China, Russia, South Africa, India, Malaysia, Indonesia, Thailand, Mexico and Turkey. Fixed effect ordinary least squares (FEOLS), fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) techniques were applied to quantify the relationship among the variables in long run. Findings suggest that financial inclusion, fintech and FDI are important factors driving energy efficiency. Financial inclusion provides opportunities toinvestors to invest in energy-efficient technologies at a reduced cost. Availability of infrastructure for fintech is shown to have a favorable impact on energy efficiency. Therefore, investment in digital infrastructure should be prioritized which will increase the availability of fintech services. Policymakers should also take steps to channelize FDI inflows into research and development (R&D) which would help in developing energy efficient technologies.