Pathways to environmental sustainability: exploring the role of FinTech, natural resources and globalization in North Africa

In recent years, financial technology (FinTech), natural resources, and globalization have gained prominence as key factors influencing environmental sustainability. However, there is a lack of research on their impact on the Load Capacity Factor (LCF) within the framework of the Load Capacity Curve (LCC) hypothesis, particularly in the North African region. Therefore, this study aims to investigate the heterogeneous effects of FinTech, natural resources, and globalization on LCF in North Africa from 1991 to 2022, marking the first comprehensive analysis of its kind in the region. This study employs the Augmented Mean Group (AMG) estimator and Hansen's threshold estimation to assess these relationships. The findings reveal that the LCC hypothesis is not valid in the region. Additionally, the study shows that the environmental benefits of FinTech become more pronounced at higher regimes, suggesting its potential to drive eco-friendly investments. Meanwhile, natural resource rents and globalization contribute to environmental degradation at lower thresholds but promote mitigation effects in the upper regime. Based on these findings, policymakers are encouraged to harness the positive effects of globalization and optimize resource utilization to improve environmental quality, ensuring a sustainable development trajectory for the region.