Innovation Meets Nature: Investigating the Environmental Impact of Fintech, Technological Innovation, and Natural Resource Wealth in North Africa

Abstract This study investigates the quantile coherency between Load Capacity Factor (LCC) and its key drivers—technological innovation, FINTECH development, and natural resource rents—in four North African countries (Algeria, Morocco, Egypt, and Tunisia) over the period 1990 to 2022. The study employs quantile-frequency dynamics complemented by wavelet coherence as a robustness check to capture variations across the distribution. Findings reveal significant cross-country heterogeneity. Morocco experiences strong positive effects on upper-quantile LCC from technological innovation and FINTECH, whereas Algeria and Tunisia face pronounced lower-quantile LCC declines attributed to natural resource dependence. Egypt exhibits mixed outcomes, with upper-quantile benefits from high-tech offset by asymmetric risks across quantiles. Causal quantile results show asymmetric effects, where population and innovation reduce LCC mainly at lower and median quantiles, while resource rents become harmful at the upper quantile. FinTech improves LCC at the median quantile, and economic growth remains insignificant across all quantiles. Policy implications underscore the importance of tailored strategies that reflect these asymmetries: promoting renewable energy investments (e.g., Algeria’s solar potential and Morocco’s issuance of green bonds), enhancing FinTech inclusivity to reduce rural gaps (Tunisia), diversifying natural resource reliance through integrated water management (Egypt), and establishing asymmetric risk buffers such as sovereign funds to mitigate lower-quantile vulnerabilities. The findings highlight the necessity of incorporating time dynamics and socioeconomic distributional factors into environmental and energy policymaking for resource-dependent and digitally evolving North African economies.