Effect of Islamic Financial Development on Carbon Emissions: A Spatial Econometric Analysis

In this research, data from 36 countries 2013 to 2018 were used examine the factors influencing CO 2 emissions in Islamic countries, focusing on impact of financial growth. The spatial econometric technique estimation findings indicate that there is no geographical association between analyzed countries. test establish existence Kuznets hypothesis for environment. Additionally, trade openness and increased energy usage have resulted an increase emissions. impacts traditional development factors, such as market institution variables, examined research. two variables direct substantial influence their significant effect appears only when nonlinear spillover effects consumption economic growth are included. institutions inversely proportional intensity carbon results while markets a emissions, negative coefficient interaction indicates ensures efficiency, which reduces expansion depth finance, measured by total assets, asset quality, earnings, efficiency banks, can result with U-shaped relationship. study demonstrates addition positive social responsibility consumer education, awareness about banking reduce enhancing greenhouse gas