Does financial development mitigate carbon emissions? Evidence from heterogeneous financial economies

Acheampong, Alex O.; Amponsah, Mary; Boateng, Elliot

doi:10.1016/j.eneco.2020.104768

Cited by 297 publications

(160 citation statements)

References 49 publications

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“…They found that the EKC is not valid. Similarly, Acheampong et al (2020) examined the influence of economic growth on environmental pollution in 83 countries and found that there is no presence of the environmental Kuznets curve (EKC). As argued by the authors, the inconsistency result of the environmental Kuznets curve (EKC) can be ascribed to the estimation techniques.…”

Section: 1environmental Kuznets Curve: An Overviewmentioning

confidence: 99%

“…In accordance with previous studies (Acheampong et al 2020;Adams et al 2020;Opoku, Adams, and Aluko 2021) that tested the environmental Kuznets curve hypothesis, we incorporated the square of gross domestic product per capita in the equation 3. Thus, the Eq.3 can be extended as follows: (5)…”

Section: Model Specificationmentioning

confidence: 99%

“…Following previous studies (Acheampong et al 2020;, we use CO2 emissions per capita which is measured in metric tons to proxy environmental pollution (CO2). In accordance with Phuc Canh and Trung Thong (2020), most of the previous studies have used credit supply as financial development measures.…”

Section: Variable Definitionmentioning

confidence: 99%

“…The inconsistent of financial development on environment pollution call for further investigation especially by taking into consideration of the new factors that can influence our economies. As argued by Acheampong et al (2020), this inconsistency of financial development on environmental pollution can be ascribed to the estimation techniques, the period, the sample, and the variable. Analogous to this argument, the current study seeks to examine the moderating effect of institutional quality on the effect of financial development on environmental pollution.…”

Section: Introductionmentioning

confidence: 99%

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How Does Institutional Quality Moderate the Influence of Financial Development on Environmental Pollution? Evidence From G20 Countries

Dossou

Ndomandji

2021

Preprint

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Unlike previous studies that focused mainly on the relationship between financial development and CO2 emissions, the current study examined the moderating effect of institutional quality on the influence of financial development on environmental pollution in G20 countries over the period 2003-2015. The panel corrected standard errors (PCSE) is employed as an econometric technique. The findings are established as follows: First, the findings show that institutional quality appears to have a mixed (positive and negative) effect on environmental pollution. Second, the findings show that financial development has mixed (positive and negative) effect on environmental pollution. Third, the findings also show that the interaction between institutional quality and financial development has a negative and statistically significant on environmental pollution, meaning that institutional quality complements financial sector to reduce environmental pollution. Policy implications are discussed.

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Section: 1environmental Kuznets Curve: An Overviewmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

Section: Variable Definitionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

How Does Institutional Quality Moderate the Influence of Financial Development on Environmental Pollution? Evidence From G20 Countries

Dossou

Ndomandji

2021

Preprint

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“…Moreover, Maji, Habibullah, and Saari (2017) examined that FD has a significant negative impact on reducing CO 2 emissions in the manufacturing and construction sectors in Malaysia. Applying GMM estimation to a panel dataset of 83 countries, Acheampong et al (2020) examined that financial market development for financial depth, and efficiency reduced the impact of CO 2 emissions in both developed and emerging economies.…”

Section: Introductionmentioning

confidence: 99%

Does financial development stimulate environmental sustainability? Evidence from a panel study of 115 countries

Uddin

2020

Bus Strat Env

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This paper investigates the moderation effect of financial development (FD) on the environmental Kuznets curve (EKC). Using comprehensive panel data of 115 countries spanning the 1990–2016 period and dividing the countries into different income groups, the researcher found systematic differences in the relationship between significant indicators of environmental degradation and economic growth. More specifically, the interaction effect of FD on the relationship between gross domestic product (GDP) growth and CO2 emissions are positive; nevertheless, the interaction effect of FD on the relationship between GDP squared and CO2 emissions become negative for all income groups and therefore supports the EKC. Moreover, the interaction effect of FD is negative on the relationship of GDP with both CH4 and PM2.5 emissions in the middle‐income groups, whereas the interaction effect of FD on the relationship between GDP squared and PM2.5 emissions are negative for the high‐income group. Our results suggest that FD can reduce environmental degradation without adversely impacting on growth.

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Consumption‐based carbon emissions, renewable energy consumption, financial development and economic growth in Chile

2021

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This paper aims to investigate the effect of financial development and renewable energy consumption on consumption-based CO 2 emissions in Chile while controlling for economic growth and electricity consumption. Based on the aim of the paper, autoregressive distributed lag (ARDL) bounds with Kripfganz and Schneider's (2018) approximations, fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS), and gradual shift causality tests are applied in this study. The outcomes clearly reveal that while financial development and renewable energy consumption reduce the consumption-based CO 2 emissions in Chile, economic growth and electricity consumption increase consumption-based carbon emissions. The gradual shift causality test provides consistent results with ARDL, FMOLS, and DOLS estimators. Therefore, policymakers in Chile should dynamically encourage the research and development of low-carbon technologies and renewable energy investments while imported nonrenewable energy sources level should be targeted, and especially those sectors which are more energy-intensive and causing to increase in consumption-based CO 2 emissions.

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Does financial development mitigate carbon emissions? Evidence from heterogeneous financial economies

Cited by 297 publications

References 49 publications

How Does Institutional Quality Moderate the Influence of Financial Development on Environmental Pollution? Evidence From G20 Countries

How Does Institutional Quality Moderate the Influence of Financial Development on Environmental Pollution? Evidence From G20 Countries

Does financial development stimulate environmental sustainability? Evidence from a panel study of 115 countries

Consumption‐based carbon emissions, renewable energy consumption, financial development and economic growth in Chile

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