Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches

Abstract

Fiscal policy is a crucial government tool for influencing and managing the national economy and creating a strong incentive for low carbon investment. Previous literature has reputable evidence that improving fiscal policy enhances environmental quality. However, the literature fails to classify the exact turning level (threshold point) below/above which the association may be negative or positive. In this regard, this research investigates the nexus between fiscal policy, foreign direct investment, financial development, trade openness, urban population, gross capital formation, labour force, and CO2 emissions in the era of globalization. The panel data set contained 105 countries over the period from 1990 to 2016. The empirical findings are estimated through linear and nonlinear panel data approaches such as fully modified ordinary least square and panel threshold regression. The subsequent findings are established: first, fiscal policy and globalization significantly increase environmental pollution. Second, the empirical results confirm the existence of the pollution haven hypothesis (PHV). Third, financial development and gross fixed capital formation are also considered some of the most crucial indicators to increase pollution levels. Fourth, trade openness, urban population, and labour force improve environmental quality. Fifth, panel threshold regression discovers that countries maintain a minimum level of fiscal policy at −1.2889. Based on these empirical findings, this study suggests that policymakers and governments of these countries should take steps to restructure their industrial sector and design macroeconomic-level carbon-free policies to support the implementation of low-energy-intensive and lower carbon production technologies.

Exploring the Effects of Economic Complexity and the Transition to a Clean Energy Pattern on Ecological Footprint From the Indian Perspective

“…However, the usage of CO 2 emissions as a proxy to capture the environmental damage caused by economic growth received massive criticism and represented a vast debatable topic. Many researchers argued that CO 2 only captures a part of the considerable damage caused by the economic growth that is, ruining the planet (Kamal et al, 2021;Khalid et al, 2021;Qader et al, 2021;. Furthermore, from a sustainability point of view, CO 2 is not a suitable measure of remnants induced by economic progress.…”

“…FD, NR, and NRE positively affect environmental pollution, while GLO and REN reduce pollutionKamal et al (2021) 105 countries 1990-2016 GLO, FD, and GDP DOLS, and FMOLS method GLO, FD and GDP significantly increase environmental pollution in the long-runKirikkaleli et al (2021) Turkey 1990-2018 GLO, GDP, and EF Dual-adjustment approach GLO impacts environmental degradation positively in the long run, while environmental pollution is negatively affected by GDP in both the short and the long run NRE, and GDP significantly accelerate the EF and RNE reduces the total EF in the long-run (Continued on following page) Frontiers in Environmental Science | www.frontiersin.org January 2022 | Volume 9 | Article 816519 environmental degradation while economic growth enhances environmental pollution spreading worldwide. Furthermore, Adebayo et al (2021) showed that CO 2 emissions trigger economic growth.…”

The impact of environmental regulations on export trade at provincial level in China: evidence from panel quantile regression

“…Integrating environmental regulations into the analytical framework of export trade can help transform the development mode of trade and thus contribute to solving the contradiction between export trade and the ecological environment. Many evidences show that there is a close relationship between environmental regulation and export Responsible Editor: Ilhan Ozturk trade in the country (Xu 2000;Dagar et al 2021;Fang et al, 2019;Kamal et al 2021).…”

“…Integrating ecological regulation into the analysis framework of export trade can better change the mode of economic development and thus alleviate the contradiction between economic development and ecological environment (Usman et al 2020a). At present, although the effect of environmental regulation has been improved, the overall effect is not satisfactory (Kamal et al 2021;Zhao et al, 2021;Yang et al, 2020;Jahanger 2021aJahanger , 2021bQader et al 2021). So, in the field of export, is environmental regulation helpful to China's export of goods and improve the export competitiveness of enterprises?…”

Travel-Business Stagnation and SME Business Turbulence in the Tourism Sector in the Era of the COVID-19 Pandemic

“…Thus, the government's role is very important and strategic in controlling the inflation rate. That is, the government's fiscal policy is an instrument with which to manage the economy and create strong incentives [51]. The economic business of the tourism sector will develop if it is followed by an increase in tourist visits based on the destinations offered.…”