The role of financial inclusion and globalization toward a sustainable economy in ASEAN countries: evidence from advance panel estimations

This study probes the sustainable development path for ASEAN countries throughout 1990–2019. In doing so, we estimated two equations with the dependent variable of Gross domestic product (GDP) and CO₂ emissions, respectively. We took independent variables of capital formation CAP, labor productivity LAB, financial inclusion FIN, globalization GLO, per capita income PI, private–public partnership, and population growth POP. The findings reveal that there exists a strong association between the estimated equations. The coefficient values obtained from cross-sectional ARDL show that CAP, LAB, FIN, GLO, and PI are increasing GDP in ASEAN countries. At the same time, POP, PI, and GLO are contributing toward more CO₂ emissions in ASEAN countries. It was observed that FIN is reducing CO₂ emissions significantly. To attain a sustainable expansion economy, these developing countries need to revise their economic and environmental policies. PI and POP are positively correlated with CO₂ emissions, which means that these countries are even consuming non-renewable energy in the economic sector. Moreover, POP is also contributing factor to environmental pollution. There is a need to increase public awareness about climatic problems.