The fourth industrial revolution and environmental efficiency: The role of fintech industry

In the recent years, fintech industry of the fourth industrial revolution has grown multifold, which raised the concerns of scholars over the excessive usage of electricity. This paper places contribution to the existing literature by analyzing the impact of fintech industry on environmental efficiency across selected EU countries. We also utilized indicators like high-tech industry and e-commerce along with fintech industry to better understand the relationship between fourth industrial revolution and environmental efficiency. This study used Data Envelopment Analysis (DEA) to evaluate environmental efficiency using two different techniques i.e., Slack-Base Measure (SBM) and Epsilon-Based Measure (EBM). Method of Moments Quantile (MMQ) regression is employed as a basic regression technique, while instrumental variables Generalized method of Moments (IV-GMM) is used for robust analysis. The results show that, the overall environmental efficiency of EU countries have improved over the years. As the indicators of the fourth industrial revolution, fintech industry and e-commerce exert a positive effect and improve environmental efficiency; however, high-tech industry reduces environmental efficiency. The results further show that, economic growth and green finance investment promote environmental efficiency, while industrialization and R&D deteriorates it. The results can be of special interest for the policy makers of technological world.