Financial structure and CO2 emissions in Asian high-polluted countries: Does digital infrastructure matter?

In this study, we examined the impact of digital infrastructure and financial structure on the carbon emissions in high-polluted economies of Asia for the period of 1991–2019. For empirical analysis, we have applied panel ARDL-PMG and the quantile regression approach. The results of the ARDL model provided some important information. Firstly, our results suggest that financial structure help reduces carbon emissions in high-polluted Asian economies in the long run. Secondly, an increase in internet subscriptions in high-polluted Asian economies improves the environmental quality. Thirdly, a rise in the population and economic development of these countries positively impacts CO2 emissions. In contrast, a rise in R&D has a significant effect on CO2 emissions in the long run. The quantile regression approach also complements our findings of the ARDL-PMG model. The results of the quantile regression confirm that an improvement in financial structure in high-polluted Asia reduces CO2 emissions. However, the estimates are the largest from 40th to 70th quantiles in almost all models. Similarly, digitalization in the country also reduces CO2 emissions, and the estimates of digital variables appeared to be significantly negative in all quantiles.