How Digital Banking Affects Greenhouse Gas Emissions in Turkey? An Empirical Investigation

Abstract

This paper investigates the impact of digital banking on greenhouse gas emissions in a case of developing economy, Turkey. Digital banking means more technological innovations in banking transactions. If banking transactions can be made in digital rather than physical environments, environmental effects are expected. We assume the environmental effect is positive, so the examination of this relationship is quite important. Technological innovations mean an increase in cost of digital banking transactions in the short run but in the long run this cost-increased effect is expected to turn opposite by an increase of active users in digital banking. We analyse the long-run relationship for the period between 2011/1 and 2019/4 by employing the Autoregressive Distributed Lag (ARDL) model. The results show that the increase in digital banking transactions have a positive and statistically significant effect on greenhouse gas emissions in Turkey. The findings reveal the positive trend in increasing transactions in digital banking in Turkey.