A Scientific Study at the Faculty of Business Administration and Finance Highlights the Role of Financial Inclusion in Supporting the Green Economy
A researcher from the Faculty of Business Administration and Finance at the International Private University for Science and Technology conducted a scientific study examining the relationship between the shadow economy (informal economy), financial inclusion, and sustainable development in emerging economies, with a particular focus on how this relationship supports the transition toward a green economy and the achievement of Sustainable Development Goals (SDGs).
The study was published in Sustainable Development—ranked first globally in the field of development according to Web of Science, with an impact factor of 8.5 (D1), a CiteScore of 14.5, and a 99th percentile ranking. The journal is published by the global publishing house Wiley.
The study aimed to address a knowledge gap regarding how financial inclusion contributes to reducing the environmental impacts of the shadow economy and its role in enhancing green transition indicators, thereby supporting the development of more sustainable and inclusive economic and financial policies.
The research was based on the Environmental Kuznets Curve framework and financial intermediation theories. It hypothesized that financial inclusion can mitigate the negative environmental effects of unregulated economic activities. To test this, the study analyzed panel data from 85 countries over the period 2000–2020, using advanced econometric techniques, including Panel-Corrected Standard Errors (PCSE), Feasible Generalized Least Squares (FGLS), and Generalized Method of Moments (GMM)-based Quantile Regression.
The study focused on measuring the impact of the informal economy on energy efficiency and renewable energy adoption levels.
The results showed that the shadow economy reduces energy efficiency, reflecting its negative environmental impact in developing countries. In contrast, enhancing financial inclusion—through expanding access to bank accounts, digital financial services, ATMs, and bank branches—significantly helps mitigate these effects and supports the expansion of renewable energy use.
The findings also revealed that the informal sector has a positive effect on renewable energy adoption; however, financial inclusion replaces this informal mechanism with more formal, transparent, and sustainable channels.
The study ultimately concluded that financial reforms and the expansion of financial inclusion are essential components in building sustainable and equitable energy systems and supporting the transition toward a green economy capable of achieving the Sustainable Development Goals, particularly Goals 7, 9, 11, and 13.
Implications of the Study for the Syrian Context
In the context of reconstruction efforts and energy transition in Syria, the study provides a strategic perspective emphasizing that addressing energy and environmental challenges cannot be separated from the development of the financial system and the strengthening of digital financial inclusion.