Technology innovation and carbon efficiency in Africa: what is the role of digitalization and digital inclusive finance?
DOI: https://doi.org/10.3846/tede.2025.23879Abstract
Improving carbon efficiency and mitigating carbon emissions is fundamental to sustainable development and the well-being of human society. Yet, no study highlighted and identified the drivers of carbon efficiency in Africa. Specifically, an empirical study on the role of technological innovation (GTI), digitalization, and digital inclusive finance (DIF) in improving carbon efficiency (CEE) in Africa is rare. To fill this gap, this study investigates the synergistic impact of green technological innovation (GTI), digitalization, and digital inclusive finance (DIF) on improving carbon efficiency (CEE) from the African perspective. A meta-frontier slack-based environmental polluting technology and mixed integervalued data envelopment analysis (DEA) is framed to gauge the carbon efficiency across oil-endowment and non-oil-endowment African countries from 2010 to 2019. The results indicate that only a few African countries appeared to be operating at efficient production levels. The bootstrapped regression results indicated an invented U-shaped nexus is established between carbon efficiency and African economic development via the extended stochastic impacts by regression on population, affluence, and technology (STIRPAT) framework. Internet usage and mobile cellular subscriptions as components of digitalization positively improve Africa’s carbon efficiency. Mobile money transaction innovation (i.e., active mobile money agents per 1000 km2) as a dimension of digital inclusive finance conserves Africa’s environmental efficiency. Green technological innovations did not drive carbon efficiency significantly in Africa and the two groups. Based on the empirical findings, pragmatic policy strategies are further discussed to boost carbon efficiency and mitigate environmental degradation in Africa.
Keywords:
sustainable development, carbon efficiency, digitalization, digital inclusive finance, green technological innovation, DEA, AfricaHow to Cite
Share
License
Copyright (c) 2025 The Author(s). Published by Vilnius Gediminas Technical University.
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
Adom, P. K. (2019). An evaluation of energy efficiency performances in Africa under heterogeneous technologies. Journal of Cleaner Production, 209, 1170–1181. https://doi.org/10.1016/j.jclepro.2018.10.320
Alam, M. M., & Murad, M. W. (2020). The impacts of economic growth, trade openness and technological progress on renewable energy use in organization for economic co-operation and development countries. Renewable Energy, 145, 382–390. https://doi.org/10.1016/j.renene.2019.06.054
Alkurdi, A., Al Amosh, H., & Khatib, S. F. A. (2024). The mediating role of carbon emissions in the relationship between the board attributes and ESG performance: European evidence. EuroMed Journal of Business, 19(4), 1016–1041. https://doi.org/10.1108/EMJB-08-2022-0144
Amowine, N., Ma, Z., Li, M., Zhou, Z., Azembila Asunka, B., & Amowine, J. (2019). Energy efficiency improvement assessment in Africa: An integrated dynamic DEA approach. Energies, 12(20), Article 3915. https://doi.org/10.3390/en12203915
Amowine, N., Ma, Z., Li, M., Zhou, Z., Yaw Naminse, E., & Amowine, J. (2020). Measuring dynamic energy efficiency in Africa: A slack-based DEA approach. Energy Science & Engineering, 8(11), 3854–3865. https://doi.org/10.1002/ese3.782
Amowine, N., Li, H., Boamah, K. B., & Zhou, Z. (2021). Towards ecological sustainability: Assessing dynamic total-factor ecology efficiency in Africa. International Journal of Environmental Research and Public Health, 18(17), Article 9323. https://doi.org/10.3390/ijerph18179323
Amowine, N. (2023). The impact of forestation and renewable energy utilisation on environmental efficiency in Africa. Economic Research – Ekonomska Istraživanja, 36(1), Article 2180412. https://doi.org/10.1080/1331677X.2023.2180412
Amowine, N., Baležentis, T., Zhou, Z., & Štreimikienė, D. (2024). Transitions towards green productivity in Africa: Do sovereign debt vulnerability, eco-entrepreneurship, and institutional quality matter? Sustainable Development, 32(4), 3405–3422. https://doi.org/10.1002/sd.2857
Asongu, S. A., Ngoungou, Y. E., & Nnanna, J. (2023). Mobile money innovations and health performance in sub-Saharan Africa. Technology in Society, 74, Article 102312. https://doi.org/10.1016/j.techsoc.2023.102312
Bai, C., Feng, C., Yan, H., Yi, X., Chen, Z., & Wei, W. (2020). Will income inequality influence the abatement effect of renewable energy technological innovation on carbon dioxide emissions? Journal of Environmental Management, 264, Article 110482. https://doi.org/10.1016/j.jenvman.2020.110482
Barišauskaitė, G., & Mikalauskienė, A. (2025). Economic and environmental factors determining carbon dioxide emissions in Lithuania. Transformations and Sustainability, 1(1), 1–11. https://doi.org/10.63775/t67saw86
Brescia, V., Esposito, P., Amelio, S., & Biancone, P. P. (2024). Rethinking green investment and corporate sustainability: the south European countries experiences during the COVID-19 crisis. EuroMed Journal of Business, 19(4), 1202–1218. https://doi.org/10.1108/EMJB-03-2023-0093
Bu, Y., Gao, J., Zhang, W., & Ai, M. (2024). The impact of digital inclusive finance on the collaborative reduction of pollutant and carbon emissions: Spatial spillover and mechanism analysis. Journal of Environmental Management, 365, Article 121550. https://doi.org/10.1016/j.jenvman.2024.121550
Buchak, G., Matvos, G., Piskorski, T., & Seru, A. (2018). Fintech, regulatory arbitrage, and the rise of shadow banks. Journal of Financial Economics, 130(3), 453–483. https://doi.org/10.1016/j.jfineco.2018.03.011
Cao, S., Nie, L., Sun, H., Sun, W., & Taghizadeh-Hesary, F. (2021). Digital finance, green technological innovation and energy-environmental performance: Evidence from China’s regional economies. Journal of Cleaner Production, 327, Article 129458. https://doi.org/10.1016/j.jclepro.2021.129458
Cheng, Y., Lv, K., & Zhu, S. (2023). How does digital financial inclusion promote green total factor productivity in China? An empirical analysis from the perspectives of innovation and entrepreneurship. Process Safety and Environmental Protection, 174, 403–413. https://doi.org/10.1016/j.psep.2023.04.002
Dauda, L., Long, X., Mensah, C. N., Salman, M., Boamah, K. B., Ampon-Wireko, S., & Kofi Dogbe, C. S. (2021). Innovation, trade openness and CO2 emissions in selected countries in Africa. Journal of Cleaner Production, 281, Article 125143. https://doi.org/10.1016/j.jclepro.2020.125143
Dong, F., Hu, M., Gao, Y., Liu, Y., Zhu, J., & Pan, Y. (2022). How does digital economy affect carbon emissions? Evidence from global 60 countries. Science of The Total Environment, 852, Article 158401. https://doi.org/10.1016/j.scitotenv.2022.158401
Dong, Z., & Yao, S. (2024). Digital finance reduces urban carbon footprint pressure in 277 Chinese cities. Scientific Reports, 14, Article 16526. https://doi.org/10.1038/s41598-024-67315-z
Du, K., Li, P., & Yan, Z. (2019). Do green technology innovations contribute to carbon dioxide emission reduction? Empirical evidence from patent data. Technological Forecasting and Social Change, 146, 297–303. https://doi.org/10.1016/j.techfore.2019.06.010
Erdoğan, S., Yıldırım, S., Yıldırım, D. Ç., & Gedikli, A. (2020). The effects of innovation on sectoral carbon emissions: Evidence from G20 countries. Journal of Environmental Management, 267, Article 110637. https://doi.org/10.1016/j.jenvman.2020.110637
Frankel, J. A., & Romer, D. H. (1999). Does trade cause growth? American Economic Review, 89(3), 379–399. https://doi.org/10.1257/aer.89.3.379
Godil, D. I., Yu, Z., Sharif, A., Usman, R., & Khan, S. A. R. (2021). Investigate the role of technology innovation and renewable energy in reducing transport sector CO2 emission in China: A path toward sustainable development. Sustainable Development, 29(4), 694–707. https://doi.org/10.1002/sd.2167
Hao, X., Wen, S., Li, Y., Xu, Y., & Xue, Y. (2022). Can the digital economy development curb carbon emissions? Evidence from China. Frontiers in Psychology, 13, Article 938918. https://doi.org/10.3389/fpsyg.2022.938918
Hashmi, R., & Alam, K. (2019). Dynamic relationship among environmental regulation, innovation, CO2 emissions, population, and economic growth in OECD countries: A panel investigation. Journal of Cleaner Production, 231, 1100–1109. https://doi.org/10.1016/j.jclepro.2019.05.325
Ibrahiem, D. M. (2020). Do technological innovations and financial development improve environmental quality in Egypt? Environmental Science and Pollution Research, 27, 10869–10881. https://doi.org/10.1007/s11356-019-07585-7
IPA. (2017). IPA annual report. https://poverty-action.org/publication/2017-ipa-annual-report
Jahangir, M. H., Mokhtari, R., & Mousavi, S. A. (2021). Performance evaluation and financial analysis of applying hybrid renewable systems in cooling unit of data centers – A case study. Sustainable Energy Technologies and Assessments, 46, Article 101220. https://doi.org/10.1016/j.seta.2021.101220
Jiakui, C., Abbas, J., Najam, H., Liu, J., & Abbas, J. (2023). Green technological innovation, green finance, and financial development and their role in green total factor productivity: Empirical insights from China. Journal of Cleaner Production, 382, Article 135131. https://doi.org/10.1016/j.jclepro.2022.135131
Jiang, S., Li, E., Wei, Y., Yan, X., He, R., Banny, E. T., & Xin, Z. (2024). Measurement and influencing factors of carbon emission efficiency based on the dual perspectives of water pollution and carbon neutrality. Science of The Total Environment, 911, Article 168662. https://doi.org/10.1016/j.scitotenv.2023.168662
Khan, A., Muhammad, F., Chenggang, Y., Hussain, J., Bano, S., & Khan, M. A. (2020a). The impression of technological innovations and natural resources in energy-growth-environment nexus: A new look into BRICS economies. Science of The Total Environment, 727, Article 138265. https://doi.org/10.1016/j.scitotenv.2020.138265
Khan, Z., Ali, S., Umar, M., Kirikkaleli, D., & Jiao, Z. (2020b). Consumption-based carbon emissions and International trade in G7 countries: The role of environmental innovation and renewable energy. Science of The Total Environment, 730, Article 138945. https://doi.org/10.1016/j.scitotenv.2020.138945
Khattak, S. I., Ahmad, M., Khan, Z. U., & Khan, A. (2020). Exploring the impact of innovation, renewable energy consumption, and income on CO2 emissions: New evidence from the BRICS economies. Environmental Science and Pollution Research, 27(12), 13866–13881. https://doi.org/10.1007/s11356-020-07876-4
Le, T.-H., Le, H.-C., & Taghizadeh-Hesary, F. (2020). Does financial inclusion impact CO2 emissions? Evidence from Asia. Finance Research Letters, 34, Article 101451. https://doi.org/10.1016/j.frl.2020.101451
Lee, J., Yucel, A. G., & Islam, M. T. (2023). Convergence of CO2 emissions in OECD countries. Sustainable Technology and Entrepreneurship, 2(1), Article 100029. https://doi.org/10.1016/j.stae.2022.100029
Liu, S., Hou, P., Gao, Y., & Tan, Y. (2022). Innovation and green total factor productivity in China: A linear and nonlinear investigation. Environmental Science and Pollution Research, 29, 12810–12831. https://doi.org/10.1007/s11356-020-11436-1
Liu, Y., Wang, J., Dong, K., & Taghizadeh-Hesary, F. (2023). How does natural resource abundance affect green total factor productivity in the era of green finance? Global evidence. Resources Policy, 81, Article 103315. https://doi.org/10.1016/j.resourpol.2023.103315
Luo, Y., Lu, Z., Muhammad, S., & Yang, H. (2021). The heterogeneous effects of different technological innovations on eco-efficiency: Evidence from 30 China’s provinces. Ecological Indicators, 127, Article 107802. https://doi.org/10.1016/j.ecolind.2021.107802
Luo, Y., Lu, Z., Salman, M., & Song, S. (2022). Impacts of heterogenous technological innovations on green productivity: An empirical study from 261 cities in China. Journal of Cleaner Production, 334, Article 130241. https://doi.org/10.1016/j.jclepro.2021.130241
Ma, Q., Khan, Z., Tariq, M., IŞik, H., & Rjoub, H. (2022). Sustainable digital economy and trade adjusted carbon emissions: Evidence from China’s provincial data. Economic Research – Ekonomska Istraživanja, 35(1), 5469–5485. https://doi.org/10.1080/1331677X.2022.2028179
Manyika, J., Lund, S., Singer, M., White, O., & Berry, C. (2016). Digital finance for all: Powering inclusive growth in emerging economies. McKinsey&Company. https://www.mckinsey.com/~/media/mckinsey/featured%20insights/Employment%20and%20Growth/How%20digital%20finance%20could%20boost%20growth%20in%20emerging%20economies/MGI-Digital-Finance-For-All-Executive-summary-September-2016.ashx
N’Drin, M. G.-R., Dahoro, D. A., Amin, A., & Kassi, D. F. (2022). Measuring convergence of energy and emission efficiencies and technology inequality across African countries. Journal of Cleaner Production, 381, Article 135166. https://doi.org/10.1016/j.jclepro.2022.135166
O’Donnell, C. J., Rao, D. S. P., & Battese, G. E. (2008). Metafrontier frameworks for the study of firm-level efficiencies and technology ratios. Empirical Economics, 34, 231–255. https://doi.org/10.1007/s00181-007-0119-4
Obobisa, E. S., Chen, H., & Mensah, I. A. (2022). The impact of green technological innovation and institutional quality on CO2 emissions in African countries. Technological Forecasting and Social Change, 180, Article 121670. https://doi.org/10.1016/j.techfore.2022.121670
Ohene-Asare, K., Tetteh, E. N., & Asuah, E. L. (2020). Total factor energy efficiency and economic development in Africa. Energy Efficiency, 13, 1177–1194. https://doi.org/10.1007/s12053-020-09877-1
Pu, Z., & Fei, J. (2022). The impact of digital finance on residential carbon emissions: Evidence from China. Structural Change and Economic Dynamics, 63, 515–527. https://doi.org/10.1016/j.strueco.2022.07.006
Qu, K., & Liu, Z. (2022). Green innovations, supply chain integration and green information system: A model of moderation. Journal of Cleaner Production, 339, Article 130557. https://doi.org/10.1016/j.jclepro.2022.130557
Sai, R., Lin, B., & Liu, X. (2023). The impact of clean energy development finance and financial agglomeration on carbon productivity in Africa. Environmental Impact Assessment Review, 98, Article 106940. https://doi.org/10.1016/j.eiar.2022.106940
Saia, A. (2023). Digitalization and CO2 emissions: Dynamics under R&D and technology innovation regimes. Technology in Society, 74, Article 102323. https://doi.org/10.1016/j.techsoc.2023.102323
Sakariyahu, R., Lawal, R., Etudaiye-Muhtar, O. F., & Ajide, F. M. (2023). Reflections on COP27: How do technological innovations and economic freedom affect environmental quality in Africa? Technological Forecasting and Social Change, 195, Article 122782. https://doi.org/10.1016/j.techfore.2023.122782
Shahbaz, M., Li, J., Dong, X., & Dong, K. (2022a). How financial inclusion affects the collaborative reduction of pollutant and carbon emissions: The case of China. Energy Economics, 107, Article 105847. https://doi.org/10.1016/j.eneco.2022.105847
Shahbaz, M., Wang, J., Dong, K., & Zhao, J. (2022b). The impact of digital economy on energy transition across the globe: The mediating role of government governance. Renewable and Sustainable Energy Reviews, 166, Article 112620. https://doi.org/10.1016/j.rser.2022.112620
Sharma, S., Prakash, G., Kumar, A., Mussada, E. K., Antony, J., & Luthra, S. (2021). Analysing the relationship of adaption of green culture, innovation, green performance for achieving sustainability: Mediating role of employee commitment. Journal of Cleaner Production, 303, Article 127039. https://doi.org/10.1016/j.jclepro.2021.127039
Shen, Z., Shao, A., Chen, J., & Cai, J. (2022). The club convergence of green productivity across African countries. Environmental Science and Pollution Research, 29, 4722–4735. https://doi.org/10.1007/s11356-021-15790-6
Simar, L., & Wilson, P. W. (2007). Estimation and inference in two-stage, semi-parametric models of production processes. Journal of Econometrics, 136(1), 31–64. https://doi.org/10.1016/j.jeconom.2005.07.009
Song, M., Peng, L., Shang, Y., & Zhao, X. (2022). Green technology progress and total factor productivity of resource-based enterprises: A perspective of technical compensation of environmental regulation. Technological Forecasting and Social Change, 174, Article 121276. https://doi.org/10.1016/j.techfore.2021.121276
Song, C., Liu, Q., Song, J., & Ma, W. (2024). Impact path of digital economy on carbon emission efficiency: Mediating effect based on technological innovation. Journal of Environmental Management, 358, Article 120940. https://doi.org/10.1016/j.jenvman.2024.120940
Sun, B., Li, J., Zhong, S., & Liang, T. (2023). Impact of digital finance on energy-based carbon intensity: Evidence from mediating effects perspective. Journal of Environmental Management, 327, Article 116832. https://doi.org/10.1016/j.jenvman.2022.116832
Tone, K. (2001). A slacks-based measure of efficiency in data envelopment analysis. European Journal of Operational Research, 130(3), 498–509. https://doi.org/10.1016/S0377-2217(99)00407-5
Tone, K. (2003). Dealing with undesirable outputs in DEA: A slacks-based measure (SBM) approach (GRIPS Research Report Series I-2003-2005). GRIPS. https://core.ac.uk/download/pdf/51221252.pdf
Wang, H., Cui, H., & Zhao, Q. (2021). Effect of green technology innovation on green total factor productivity in China: Evidence from spatial durbin model analysis. Journal of Cleaner Production, 288, Article 125624. https://doi.org/10.1016/j.jclepro.2020.125624
Wang, H., & Guo, J. (2022). Impacts of digital inclusive finance on CO2 emissions from a spatial perspective: Evidence from 272 cities in China. Journal of Cleaner Production, 355, Article 131618. https://doi.org/10.1016/j.jclepro.2022.131618
Wang, J., Dong, K., Dong, X., & Taghizadeh-Hesary, F. (2022a). Assessing the digital economy and its carbon-mitigation effects: The case of China. Energy Economics, 113, Article 106198. https://doi.org/10.1016/j.eneco.2022.106198
Wang, J., Luo, X., & Zhu, J. (2022b). Does the digital economy contribute to carbon emissions reduction? A city-level spatial analysis in China. Chinese Journal of Population, Resources and Environment, 20(2), 105–114. https://doi.org/10.1016/j.cjpre.2022.06.001
Wang, X., Wang, X., Ren, X., & Wen, F. (2022c). Can digital financial inclusion affect CO2 emissions of China at the prefecture level? Evidence from a spatial econometric approach. Energy Economics, 109, Article 105966. https://doi.org/10.1016/j.eneco.2022.105966
Wang, Q., Zhang, C., & Li, R. (2023). Does renewable energy consumption improve carbon efficiency? Evidence from 116 countries. Energy & Environment, 36(2), 807–828. https://doi.org/10.1177/0958305X231180692
Wang, X., & Zhong, M. (2023). Can digital economy reduce carbon emission intensity? Empirical evidence from China’s smart city pilot policies. Environmental Science and Pollution Research, 30, 51749–51769. https://doi.org/10.1007/s11356-023-26038-w
Wang, Z., & Huang, Y. (2023). Natural resources and trade-adjusted carbon emissions in the BRICS: The role of clean energy. Resources Policy, 86, Article 104093. https://doi.org/10.1016/j.resourpol.2023.104093
Xu, L., Fan, M., Yang, L., & Shao, S. (2021). Heterogeneous green innovations and carbon emission performance: Evidence at China’s city level. Energy Economics, 99, Article 105269. https://doi.org/10.1016/j.eneco.2021.105269
Yan, X., Deng, Y., Peng, L., & Jiang, Z. (2023). Study on the impact of digital economy development on carbon emission intensity of urban agglomerations and its mechanism. Environmental Science and Pollution Research, 30, 33142–33159. https://doi.org/10.1007/s11356-022-24557-6
Yi, M., Liu, Y., Sheng, M. S., & Wen, L. (2022). Effects of digital economy on carbon emission reduction: New evidence from China. Energy Policy, 171, Article 113271. https://doi.org/10.1016/j.enpol.2022.113271
York, R., Rosa, E. A., & Dietz, T. (2003). STIRPAT, IPAT and ImPACT: Analytic tools for unpacking the driving forces of environmental impacts. Ecological Economics, 46(3), 351–365. https://doi.org/10.1016/S0921-8009(03)00188-5
Yu, H., Wei, W., Li, J., & Li, Y. (2022). The impact of green digital finance on energy resources and climate change mitigation in carbon neutrality: Case of 60 economies. Resources Policy, 79, Article 103116. https://doi.org/10.1016/j.resourpol.2022.103116
Zarrin, M. (2023). A mixed-integer slacks-based measure data envelopment analysis for efficiency measuring of German university hospitals. Health Care Management Science, 26(1), 138–160. https://doi.org/10.1007/s10729-022-09620-5
Zhai, S., Wei, R., Zhou, X., & Zhou, Y. (2024). The impact of agricultural trade on carbon emissions in emerging countries: Evidence from 30 countries. Transformations in Business & Economics, 23(3), 900–919.
Zhang, L., Mu, R., Zhan, Y., Yu, J., Liu, L., Yu, Y., & Zhang, J. (2022). Digital economy, energy efficiency, and carbon emissions: Evidence from provincial panel data in China. Science of The Total Environment, 852, Article 158403. https://doi.org/10.1016/j.scitotenv.2022.158403
Zhang, M., & Liu, Y. (2022). Influence of digital finance and green technology innovation on China’s carbon emission efficiency: Empirical analysis based on spatial metrology. Science of The Total Environment, 838, Article 156463. https://doi.org/10.1016/j.scitotenv.2022.156463
Zhao, J., Jiang, Q., Dong, X., & Dong, K. (2021). Assessing energy poverty and its effect on CO2 emissions: The case of China. Energy Economics, 97, Article 105191. https://doi.org/10.1016/j.eneco.2021.105191
Zhao, X., Dong, Y., & Gong, X. (2022a). The digital economy and carbon productivity: Evidence at China’s city level. Sustainability, 14(17), Article 10642. https://doi.org/10.3390/su141710642
Zhao, X., Nakonieczny, J., Jabeen, F., Shahzad, U., & Jia, W. (2022b). Does green innovation induce green total factor productivity? Novel findings from Chinese city level data. Technological Forecasting and Social Change, 185, Article 122021. https://doi.org/10.1016/j.techfore.2022.122021
Zheng, H., Wu, Y., He, H., Delang, C. O., Lu, J., Yao, Z., & Dong, S. (2024). Urbanization and urban energy eco-efficiency: A meta-frontier super EBM analysis based on 271 cities of China. Sustainable Cities and Society, 101, Article 105089. https://doi.org/10.1016/j.scs.2023.105089
Zhou, P., Ang, B. W., & Han, J. Y. (2010). Total factor carbon emission performance: A Malmquist index analysis. Energy Economics, 32(1), 194–201. https://doi.org/10.1016/j.eneco.2009.10.003
View article in other formats
CrossMark check
Published
Issue
Section
Copyright
Copyright (c) 2025 The Author(s). Published by Vilnius Gediminas Technical University.
License
This work is licensed under a Creative Commons Attribution 4.0 International License.