Is electronic finance sustainable or not in the European Union? New insights from the panel vector autoregression approach

Today, as a result of the developments and widespread use of information and communication technologies, the weight of online shopping in the economy has increased. The environmental impacts of this new order, which is an important part of electronic finance, are discussed. In this study, the effect of electronic finance, economic growth, renewable energy consumption, and urbanization on emissions in EU member countries is examined using the panel vector autoregression (PVAR) approach for the period from 2005 to 2018. The main results suggest that e-finance has a positive and statistically significant effect on CO₂ emissions. However, the renewable energy consumption-increasing effect of e-finance is greater than its emission-reducing effect. Moreover, renewable energy consumption has a statistically insignificant effect on emissions. Therefore, the contribution of e-finance on environmental quality weakens. The requirement for EU member countries to prioritize the use of environmentally friendly energy to benefit from the environmental contribution of e-finance in the most optimal way is stated as the main policy implication of this study.