Environmental regulation and its influence on energy efficiency and environmental performance: do technology innovation and financial efficiency matter?

Global warming has recently become a significant concern for world leaders. Financial efficiency, environmental regulations, and green technologies are widely recognized as important contributors to a clean environment. Consequently, the primary motive of this study is to investigate the impact of financial efficiency, environmental regulations, and green technologies on CO2 emissions and energy efficiency in top polluted economies over the period 1995 to 2020. To that end, the study relies on the ARDL-PMG model, which can provide both short- and long-run estimates simultaneously. The findings of the model imply that environmental innovation and regulations helps improve energy efficiency and environmental quality in the long run. In contrast, financial development deteriorates the environmental quality and improves energy efficiency. Therefore, policy experts in top polluted economies must increase research and development activities to promote green technologies and introduce strict environmental-related regulations to complement other mitigating policies.