Research Information System
Research in International Business and Finance, vol.85, 2026 (SSCI, Scopus)
Rapid economic growth and increasing energy demand have heightened environmental pressures in BRICS-T countries, making ecological sustainability a critical issue. This study examines the moderating role of renewable energy in the connection between financial development and ecological footprint during 1995–2024, while assessing the direct effects of globalization, trade openness, urbanization, and tourism. Thus, it offers a novel and complementary perspective on the relationship between financial development and sustainability. The study employs a panel data set and applies the Cup-FM and Ba-OLS estimators while accounting for cross-sectional dependence and slope heterogeneity. Causality relationships have been analyzed using the Emirmahmutoglu and Kose panel causality test. The findings show that financial development has a positive and significant effect on the ecological footprint (β = 0.422; p < 0.01), while the square of financial development reveals a U-shaped relationship with a negative coefficient (β = −0.137; p < 0.05). Renewable energy consumption directly reduces ecological pressures (β = −0.445; p < 0.01) and moderates the relationship between financial development and ecological footprint. Globalization (β = 0.600; p < 0.01), urbanization (β = 0.266; p < 0.01), tourism (β = 0.122; p < 0.01), and trade openness (β = 0.144; p < 0.01) all increase the ecological footprint. Causality analysis reveals a unidirectional causal connection between financial development, renewable energy, globalization, urbanization, tourism, and openness, and their impact on the ecological footprint. The results reveal that financial development and renewable energy enhance environmental sustainability in BRICS-T countries, highlighting the importance of green finance, renewable energy investments, sustainable urbanization, and eco-friendly tourism in this context.