ORIGINAL RESEARCH article
Front. Environ. Sci.
Sec. Environmental Policy and Governance
Volume 13 - 2025 | doi: 10.3389/fenvs.2025.1643175
Green Finance, Mineral Resource Rents, and Industrial Growth: Exploring Environmental Trade-offs and Mitigating Channels in E7 Nations
Provisionally accepted
- 1Guangzhou College of Technology and Business, Foshan, China
- 2Northern Border University, Arar, Saudi Arabia
- 3Prince Sultan University, Riyadh, Saudi Arabia
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Amid growing climate and resource pressures, E7 countries face the urgent challenge of aligning economic growth with ecological sustainability. The current study observes the influence of population growth, industrial development, mineral resource rents, institutional quality, and green finance on environmental sustainability in E7 nations using annual data from 1996 to 2023.Environmental sustainability is measured using the Load Capacity Factor (LCF), contributing to the literature by applying a comprehensive and balance-sensitive metric rarely used in emerging economy contexts. Using 196 observations and advanced panel methods-MMQR, GMM, FGLS, and CCEMG-the analysis addresses key econometric challenges, including endogeneity, slope heterogeneity, non-stationarity, and cross-sectional dependence. Results show that industrial growth consistently harms sustainability, while green finance has a robust, non-linear positive effect, particularly in higher-performing countries. Mineral resource rents improve sustainability in countries with stronger institutions, revealing the moderating role of governance. The CCEMG findings confirm the sensitivity of these effects to common shocks, and GMM models validate the persistence of sustainability outcomes. This study offers robust empirical evidence for policymakers in emerging markets, emphasizing the conditional benefits of green finance and institutional governance in supporting long-term ecological sustainability.
Keywords: Load capacity factor, green finance, Mineral rents, Industrial growth, Population Growth, GMM
Received: 08 Jun 2025; Accepted: 08 Aug 2025.
Copyright: © 2025 He, Ben-Salha and Choukaier. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Wuqiang He, Guangzhou College of Technology and Business, Foshan, China
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