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Financial development and geopolitical risks are crucial for understanding the consumption of renewable energies (CREs), given the sustainability challenges of the global economy. This research examines the nonlinear impact of financial development on adopting renewable energies in 10 emerging countries facing geopolitical risks between 1985 and 2022. By employing two regime‐switching approaches (panel threshold autoregressive (PTAR) and panel smooth transition autoregression (PSTAR)), the results indicate nonlinear correlations between domestic bank credit granted to the private sector and the adoption of renewable energies. The optimal threshold value of the PTAR model is 40.171, while those of the PSTAR model are 35.705 and 122.9. Below the thresholds of the PTAR and PSTAR models, financial development decreases the CREs. Beyond these thresholds, financial development promotes CRE through specific financial incentives, such as low‐interest loans and tax credits for renewable energy projects, as well as the creation of specialized financial instruments, such as green bonds. Geopolitical issues have prompted governments to diversify their energy sources and intensify their investments in renewable energy to strengthen energy security and reduce dependence on the volatile fossil fuel markets. Therefore, in terms of policy implications, financial education, the mitigation of geopolitical risks, and renewable energy goals must be priorities in national development efforts to promote sustainable economic growth. JEL Classification: C23, C54, K32, Q43

As digital technologies rapidly transform global economies, the digital financial inclusion index (DFII) has emerged as a critical driver of economic growth, particularly in developing regions. In the context of China, where regional economic disparities persist, the expansion of digital financial services offers a promising avenue to boost regional development, promote inclusive growth, and enhance environmental sustainability. This study looks into how digital financial inclusion affects regional economic growth (GRP) in China’s provinces. It does this by using a panel threshold autoregressive model (PTAR) and a panel smooth transition autoregressive model (PSTAR) to see if the relationship is not always linear. Drawing on data from 31 Chinese provinces between 2003 and 2022, the analysis uncovers significant threshold effects, revealing distinct phases where digital financial inclusion’s influence on economic growth intensifies as financial inclusion increases. Furthermore, digital financial services empower small and medium-sized enterprises (SMEs) and individual entrepreneurs to invest in eco-friendly innovations and low-emission technologies. By lowering barriers to funding, digital financial inclusion encourages the adoption of cleaner production processes and efficient resource management, which can significantly decrease emissions and improve air quality. Additionally, enhanced financial literacy and access to information through digital platforms enable consumers to make environmentally conscious choices, further contributing to reduced pollution levels. These findings provide empirical evidence of the transformative role of digital finance in both regional development and environmental sustainability, underscoring the need for policy interventions that enhance financial inclusion to drive economic growth.

The impact of accelerated advancements in artificial intelligence (AI) on economic development remains a topic of debate in the current era. It is thought by some that AI has the potential to stimulate economic development; however, the precise function of AI remains uncertain. In order to investigate the influence of AI on economic growth in 30 European countries between 2000 and 2021, this study employed both the symmetric (PMG-ARDL) and asymmetric (PMG-NARDL) models. The ARDL model's results suggest that AI has a stimulating effect on economic development. A 0.217% increase in long-term economic growth is associated with an increase in AI. In the NARDL model, the growth of the economy was observed to be increased by 0.026% as a result of positive shocks to the positive AI variable. Conversely, negative shocks were found to have a negative impact, with a decrease of 0.029% in economic growth. It is posited that AI may stimulate economic development by increasing efficiency, promoting economies of scale, enhancing the quality of products and services, and improving working conditions. Furthermore, the study identifies the displacement of employment, the rising costs of training and adaptation, and the expansion of economic and social inequality. To address these challenges, policymakers must facilitate the creation of alternative employment opportunities, promote the development of new AI-driven industries, and implement rehabilitation programs for workers at risk of automation. Balancing technological advancement with job preservation and high-quality employment necessitates a collaborative approach between public and private sectors.

Since its independence, Tunisia has embarked on monetary and financial sector reforms aimed at boosting economic growth. However, these reforms have not been effective due to inflation pressures in this country. Thus, this paper examines the nature of the relationship between financial development and economic growth between 1965 and 2019, using the non-linear logistic smooth transition regression model and considering inflation as a threshold financial development. The results show the existence of a non-linear abrupt relationship with an inflation threshold equal to 3.63%. Specifically, when inflation is below 3.63%, all variables, including inflation, have a significant and positive impact on economic growth. However, when inflation exceeds the estimated threshold, inflation has a significant and negative impact with an elasticity equal to − 0.365. To effectively manage inflation, the Tunisian authorities are encouraged to set and embrace specific inflation targets as a goal. This approach aims to mitigate inflationary pressures and foster a favourable environment for financial development in Tunisia, thereby promoting economic growth. Hence, it becomes imperative to implement such measures that alleviate inflationary pressures and drive economic growth through the facilitation of development finance by the banking sector.

This study analyzes the impact of adopting International Financial Reporting Standards (IFRS) on the cost of equity capital for firms listed on STOXX Europe 600 using a sample of 9773 firm-year observations between 1994 and 2022. We estimate the cost of equity capital using the modified price–earnings–growth ratio model and employ the GMM system to investigate the effect of IFRS Standards on the cost of equity capital. Our results indicate that IFRS adoption reduces firms’ cost of equity capital. We performed various sensitivity analyses to ensure the reliability of our results. Overall, this study contributes to the extant literature on the cost of equity capital implications of IFRS adoption and provides valuable insights for investors, regulators, and policymakers.

The rapid rise in climate and ecological challenges have allowed policymakers to introduce stringent environmental policies. In addition, financial limitations may pose challenges for countries looking to green energy investments as energy transition is associated with geopolitical risks that could create uncertainty and dissuade green energy investments. The current study uses PTR and PSTR as econometric strategy to investigate how geopolitical risks and financial development indicators influence energy transition in selected industrial economies. Our findings indicate a non-linear DCPB-RE relationship with a threshold equal to 39.361 in PTR model and 35.605 and 122.35 in PSTR model. Additionally, when the threshold was estimated above, financial development indicators and geopolitical risk positively impacts renewable energy. This confirms that these economies operate within a geopolitical context, with the objective of investing more in clean energy. We report novel policy suggestion to encourage policymakers promoting energy transition and advance the sustainable financing development and ecological sustainability.

In recent years, the BRICS economies have attracted significant amounts of foreign direct investment (FDI). These FDI inflows has helped fuel their economic growth rates, which leads one to predict that they will continue to outpace the G-7 economies in the near future. Thus, the aim of this study is to investigate the nature of the relationship between FDI and economic growth in BRICS countries from 1990 to 2020, using the Panel Threshold Autoregressive (PTAR) and Panel Smooth Transition Autoregressive (PSTAR) models. The study reveals that there is a non-linear relationship between FDI and economic growth, with the presence of thresholds equal to − 1.294 (1.42% of GDP) and − 1.283 (1.43% of GDP), respectively. Furthermore, the findings indicate that trade, domestic investment, and human capital have a positive impact on economic growth above these estimated thresholds more than below which confirm that more attracting FDI represents an important factor for these countries to improve economic growth. The study’s findings have significant implications for policymakers in the BRICS countries, particularly in response to the global challenges facing these economies. Thus, in order to promote economic growth and development, they should adopt a liberal strategy that encourages FDI. This strategy may involve creating an enabling environment for FDI by implementing policies that enhance the ease of doing business, improving the quality of infrastructure, and enhancing the legal and regulatory framework.