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Examining the moderating role of environmental regulations on financial development and ecological footprint in the MENA region.

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Title: Examining the moderating role of environmental regulations on financial development and ecological footprint in the MENA region.
Authors: Zhou, Dejun1 (AUTHOR), Saeed, Ummar Faruk2 (AUTHOR), Kongkuah, Maxwell3 (AUTHOR) maxwellkongkuah@gmail.com, Wiredu, Ishmael2 (AUTHOR)
Source: Environment, Development & Sustainability. May2026, Vol. 28 Issue 5, p11497-11524. 28p.
Subject Terms: *Environmental regulations, *Ecological impact, *Environmental economics, *Foreign investments, *Sustainable development, *Banking industry, *Kuznets curve
Abstract: This study investigates the moderating impact of environmental regulations (ER) on the relationship between financial development (FD), foreign direct investment (FDI), and ecological footprint (EF) within the frameworks of the Environmental Kuznets Curve and Porter's hypothesis. The problem addressed is the dual challenge of fostering economic growth through FD and FDI while mitigating environmental degradation in the MENA region. The aim is to understand how ER can balance these dynamics. Utilizing panel data from 18 MENA countries spanning 1990–2022, the study employs Dynamic Common Correlated Effects and Pooled Mean Group estimations for the empirical analysis. Our results reveal that all three FD indicators—financial development of the banking sector, financial sector, and private sector—are associated with a reduction in EF. FDI outflows also contribute to lowering the EF, whereas FDI inflows have an adverse effect, increasing EF. A curvilinear relationship is observed among FD, FDI, and EF, indicating that while the initial impact is positive, it diminishes beyond a certain threshold. Importantly, ER is found to positively influence the relationship between FD, FDI, and EF, mitigating negative environmental impacts. GMM modeling was applied in the study to handle issues of endogeneity. The findings highlight the necessity for policymakers to prioritize and enhance ER and policies to achieve Sustainable Development Goals. Strengthening ER can ensure that economic development via FD and FDI does not come at the expense of environmental sustainability. [ABSTRACT FROM AUTHOR]
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Header DbId: enr
DbLabel: Energy & Power Source
An: 193284019
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PubType: Academic Journal
PubTypeId: academicJournal
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  Data: Examining the moderating role of environmental regulations on financial development and ecological footprint in the MENA region.
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  Data: <searchLink fieldCode="AR" term="%22Zhou%2C+Dejun%22">Zhou, Dejun</searchLink><relatesTo>1</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Saeed%2C+Ummar+Faruk%22">Saeed, Ummar Faruk</searchLink><relatesTo>2</relatesTo> (AUTHOR)<br /><searchLink fieldCode="AR" term="%22Kongkuah%2C+Maxwell%22">Kongkuah, Maxwell</searchLink><relatesTo>3</relatesTo> (AUTHOR)<i> maxwellkongkuah@gmail.com</i><br /><searchLink fieldCode="AR" term="%22Wiredu%2C+Ishmael%22">Wiredu, Ishmael</searchLink><relatesTo>2</relatesTo> (AUTHOR)
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  Data: <searchLink fieldCode="JN" term="%22Environment%2C+Development+%26+Sustainability%22">Environment, Development & Sustainability</searchLink>. May2026, Vol. 28 Issue 5, p11497-11524. 28p.
– Name: Subject
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  Data: *<searchLink fieldCode="DE" term="%22Environmental+regulations%22">Environmental regulations</searchLink><br />*<searchLink fieldCode="DE" term="%22Ecological+impact%22">Ecological impact</searchLink><br />*<searchLink fieldCode="DE" term="%22Environmental+economics%22">Environmental economics</searchLink><br />*<searchLink fieldCode="DE" term="%22Foreign+investments%22">Foreign investments</searchLink><br />*<searchLink fieldCode="DE" term="%22Sustainable+development%22">Sustainable development</searchLink><br />*<searchLink fieldCode="DE" term="%22Banking+industry%22">Banking industry</searchLink><br />*<searchLink fieldCode="DE" term="%22Kuznets+curve%22">Kuznets curve</searchLink>
– Name: Abstract
  Label: Abstract
  Group: Ab
  Data: This study investigates the moderating impact of environmental regulations (ER) on the relationship between financial development (FD), foreign direct investment (FDI), and ecological footprint (EF) within the frameworks of the Environmental Kuznets Curve and Porter's hypothesis. The problem addressed is the dual challenge of fostering economic growth through FD and FDI while mitigating environmental degradation in the MENA region. The aim is to understand how ER can balance these dynamics. Utilizing panel data from 18 MENA countries spanning 1990–2022, the study employs Dynamic Common Correlated Effects and Pooled Mean Group estimations for the empirical analysis. Our results reveal that all three FD indicators—financial development of the banking sector, financial sector, and private sector—are associated with a reduction in EF. FDI outflows also contribute to lowering the EF, whereas FDI inflows have an adverse effect, increasing EF. A curvilinear relationship is observed among FD, FDI, and EF, indicating that while the initial impact is positive, it diminishes beyond a certain threshold. Importantly, ER is found to positively influence the relationship between FD, FDI, and EF, mitigating negative environmental impacts. GMM modeling was applied in the study to handle issues of endogeneity. The findings highlight the necessity for policymakers to prioritize and enhance ER and policies to achieve Sustainable Development Goals. Strengthening ER can ensure that economic development via FD and FDI does not come at the expense of environmental sustainability. [ABSTRACT FROM AUTHOR]
PLink https://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=enr&AN=193284019
RecordInfo BibRecord:
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    Identifiers:
      – Type: doi
        Value: 10.1007/s10668-024-05430-7
    Languages:
      – Code: eng
        Text: English
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      Pagination:
        PageCount: 28
        StartPage: 11497
    Subjects:
      – SubjectFull: Environmental regulations
        Type: general
      – SubjectFull: Ecological impact
        Type: general
      – SubjectFull: Environmental economics
        Type: general
      – SubjectFull: Foreign investments
        Type: general
      – SubjectFull: Sustainable development
        Type: general
      – SubjectFull: Banking industry
        Type: general
      – SubjectFull: Kuznets curve
        Type: general
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      – TitleFull: Examining the moderating role of environmental regulations on financial development and ecological footprint in the MENA region.
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            NameFull: Zhou, Dejun
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            NameFull: Saeed, Ummar Faruk
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            NameFull: Kongkuah, Maxwell
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            NameFull: Wiredu, Ishmael
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            – D: 01
              M: 05
              Text: May2026
              Type: published
              Y: 2026
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              Value: 28
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              Value: 5
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            – TitleFull: Environment, Development & Sustainability
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