Financial Development and the Quality of the Environment in Nigeria: An Application of Non-Linear ARLD Approach

Jakada, Aminu Hassan; Mahmood, Suraya; Ahmad, Ali Umar; Farouq, Ibrahim Sambo; Mustapha, Umar Aliyu

doi:10.5430/rwe.v11n1p78

Cited by 12 publications

(12 citation statements)

References 62 publications

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“…This finding indicates that a 1% increase in in Nigeria will lead to a 0.15% decrease in CO2 emissions. This result confirm with a priori expectation and support the pollution halo hypothesis and confirm with the findings of Jakada, Mahmood, Ahmad, Farouq, and Mustapha (2020).…”

Section: Resultssupporting

confidence: 92%

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2021

International Journal of Business, Economics and Management

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The study aims to look at the relationship between environmental quality and financial instability in Nigerian over the period of 1970 to 2019 respectively. The Autoregressive Distributed Lag (ARDL) model is used in estimating the short-run as well as the long-run relationship between financial instability and the quality of the environment. The results of the study reveal that financial instability has a significant and positive impact on CO2 emissions, implying that financial instability is lowering the quality of environment in Nigeria. In addition, consistency and strength are verified by the application of numerous tests of diagnostic. The research introduces new insights that would not only be of benefit in advancing prevailing research but may also be of specific concern to policymakers in the financial sector of the country and its starring role in enhancing the quality of the environment. The results recommend that to prevent financial instability and its effect on environmental degradation in the light of policy consequences, financial sector reforms should be implemented with great caution. Contribution/Originality: This study contributes to the existing literature as the first research consideringNigeria that establishes the Aggregate Financial Stability Index (AFSI) to investigate the relationship between financial stability and environmental quality. The AFSI is made up of sub-indices that measure the development, vulnerability, and soundness of the financial sector. INTRODUCTIONDevelopment initiatives in the modern age are targeted at achieving environmentally sustainable economic growth rather than accruing and concentrating solely on growth. A clear correlation between economic activities and their adverse effects on environmental standards prevails in the current literature, and there is agreement among scholars that economic activities promote environmental degradation (Ahmad, Khan, Ur Rahman, & Khan, 2018). Many advanced and developing economies are making comprehensive efforts to resolve the issue of high CO2 emissions.

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Section: Resultssupporting

confidence: 92%

Untitled

2021

International Journal of Business, Economics and Management

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“…One percent increase in LNDCB+ insignificantly reduces carbon emissions on average of 0.17% CO 2 emission. (Ahmad et al, 2020;Lahiani, 2020;Odugbesan & Adebayo, 2020;Omoke et al, 2020). Similarly one percent decline in LNDCBsignificantly increase on average carbon emission an average of 0.58% (Ahmad et al, 2021;Jakada et al, 2020;Karasoy et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

“…There is mixed evidence regarding the relationship betweeen financial development on CO 2 emissions in Pakistan. Some studies argued that financial development has increased CO 2 emission in Pakistan Majeed et al, 2020;Ahmad et al, 2020;Raza & Shah, 2018;Shahzad et al, 2017;Siddique, 2017;Javid & Sharif, 2016;Muhammad & Ghulam, 2013;Zhang, 2011). These studies argue that the financial development help the consumers to get loans easily who prefer to buy refrigerators, motorbikes, cars, air-conditioners that emit CO 2 emissions.…”

Section: Introductionmentioning

confidence: 99%

Can Financial Development Help in Raising Sustainable Economic Growth and Reduce Environmental Pollution in Pakistan? Evidence from Non Linear ARDL Model

Amjad

Asghar

Rehman

2021

READS

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It is a global challenge to reduce environmental pollution and enhance sustainable economic growth. This study explores the role of financial development as an instrument in reducing environmental pollution and enhancing sustainable economic development in Pakistan for the period 1980-2020. The Non-linear Autoregressive Distributed Lag (NARDL) econometrics technique has been utilized to find the association between environmental pollution, economic growth, and financial development. The results show that positive shocks of financial development increase economic growth and reduce environmental pollution. While the negative shocks of financial development increase both economic growth and environmental pollution. Globalization has negative impact on economic growth and the use of energy increases economic growth and environmental pollution. The study suggests that the State Bank of Pakistan and other financial institutions should formulate and implement soft loan policies to induce the private investors to use low carbon emission technologies.

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“…Studies on carbon emission intensity and financial development are still scarce in the existing literature in Nigeria context. The earlier study by ( Aminu et al 2020) adopted Auto-Regressive Distributed Lag technique that failed to capture sufficient (STIRPAT) dynamic features, also, (Omoke et al 2020) (Adejumo and Asongu 2020;Adejumo 2020;Ali et al 2019;Ali et al 2016;Rafindadi 2016;Riti and Shu 2016) used carbon emissions CO2 to measure degradation in Nigeria. The rise in financial sector development along with the carbon emission increase call for urgent attention for environmental sustainability.…”

Section: Introductionmentioning

confidence: 99%

Examining the link between carbon emission, carbon emission intensity and financial development in Nigeria. A Dynamic ARDL Simulation

Okere¹,

Ogbulu²,

Muoneke³

et al. 2021

Preprint

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The need for adequate and consistent policies to mitigate the continuous rise of carbon emission have motivated the energy economist in the past decades to actively involved and explore common economic agents that are driving the rising pattern in the environmental pollution. This study is positioned towards contributing to the on-going debates on this issue by exploring the impact of bank credit to the private sector on aggregate carbon emissions and carbon emission intensity in Nigeria over the period 1971– 2016 using dynamic ARDL simulations. Controlling for the influence of fossil energy intensity of consumption and economic globalization, the study found that bank credit to the private sector has a positive significant long-run increasing effect on aggregate CO2 emission and carbon emission intensity in the economy. Second, the estimated coefficients show that fossil energy intensity of consumption and economic globalization have a significant long-run and short-run increasing impact on aggregate CO2 emission and carbon emission intensity in the economy. In contrast, the population has a significant long-run and short-run reducing effect on aggregate CO2 emission and only the long run reducing effect on carbon emission intensity. Third, economic growth has significant short-run and increasing long-run effects on aggregate CO2 emission and a long run increasing effect on carbon emission intensity. In sum, the results show that the economy is yet to transient to renewable energy.

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Financial Development and the Quality of the Environment in Nigeria: An Application of Non-Linear ARLD Approach

Cited by 12 publications

References 62 publications

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Can Financial Development Help in Raising Sustainable Economic Growth and Reduce Environmental Pollution in Pakistan? Evidence from Non Linear ARDL Model

Examining the link between carbon emission, carbon emission intensity and financial development in Nigeria. A Dynamic ARDL Simulation

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