Role of financial development for sustainable economic development in low middle income countries

Hunjra, Ahmed Imran; Azam, Muhammad; Bruna, Maria Giuseppina; Taşkın, Dilvin

doi:10.1016/j.frl.2022.102793

Cited by 76 publications

(31 citation statements)

References 70 publications

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“…Environmental quality is a primary emphasis of Asia's sustainable policies to get the most out of economic growth at various stages of development. Several subsequent investigations, however, support our findings [5,7,60]. Pooled OLS estimates demonstrate that FDI has substantial and negative values at the 50 percentile and 75 percentiles in Asia as shown in Table 5.…”

Section: Methodssupporting

confidence: 80%

Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method

Azam¹,

Abbassi²,

Tayachi³

et al. 2022

Preprint

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Nowadays, determining the socioeconomic factors' influence on environmental quality is a crucial issue for policymakers. We aim to explore the impact of socioeconomic factors i.e., ethnic conflicts inform ethnic fragmentation, institutions quality effectiveness, and energy consumption on environmental quality by testing the various hypotheses (Pollution Halo Hypothesis, IPAT, and EKC) in 40 selected Asian countries throughout 1993-2019. We also use a set of control variables which are gross domestic product per capita, foreign direct investment inflows, and population growth to determine their impact on environmental quality. We use the Panel Quintile Regression Method of 0.25, 0.5, and 0.75 to analyze the results. We find ethnic conflict negatively affects the environmental quality at all quantiles. The institution's variables regulatory quality and rule of law negatively influence the environmental quality. Our result supports Porter's hypothesis because the effect of direct foreign investment on the amount of CO2 emissions is negative and significant at 0.25, 0.5, and 0.75 quantiles which states that foreign direct investment in the host country supports environmental quality. Furthermore, our results support the IPAT hypothesis in selected Asian countries.

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Section: Methodssupporting

confidence: 80%

Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method

Azam¹,

Abbassi²,

Tayachi³

et al. 2022

Preprint

View full text Add to dashboard Cite

show abstract

“…The verification of the research model based on fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) shows that both financial development and institutional quality significantly promote green economic growth. Similar positive and driving effects of financial development on sustainable economic growth are evident in the empirical findings of Hunjra et al (2022) for a panel of 50 low‐ and middle‐income from 1991 to 2020.…”

Section: Literature Reviewsupporting

confidence: 78%

Technological advancement and regulatory quality

Shen,

Liu,

Lin

et al. 2023

African Development Review

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This study investigates the intervening role of technological innovation and regulatory quality in the financial sector–sustainable economic growth nexus in accordance with SDG‐8 in 38 sub‐Saharan African (SSA) countries from 1996 to 2020. The empirical model endogenizes government expenditure, structural change, foreign direct investment, and human capital as covariates. The study verifies and examines the hypothesis by adopting common correlated mean group, system generalized method of moments, and panel quantile regression. Findings reveal that financial development drives sustainable economic growth in SSA for the long‐run model with improved magnitudinal effects observed with the intervention of technological innovation and regulatory quality. Furthermore, both technological innovation and regulatory quality promote sustainable economic growth in SSA. Moreover, structural change, foreign direct investment and government are boosters for sustainable economic growth whereas military expenditure hinders the growth. Recommendations are made based on the findings.

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“…Because the requirements of sustainable economic development must pressurize FD to effectively allocate financial resources. Moreover, a higher level of FD would consider low-carbon and sustainable development as the fundamental task, because investors and financial institutions have enough motivation to access the low-carbon projects based on prosperous market environment (Hunjra et al 2022 ). When the FD gradually distributes more financial resources to environmentally friendly projects, FD can promote emissions reduction.…”

Section: Discussionmentioning

confidence: 99%

A nexus study of carbon emissions and financial development in China using the decoupling analysis

Yuan

Liao

Wang

2022

Environ Sci Pollut Res

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Investigating the linkage between financial development ( FD ) and carbon emissions is important for mitigating climate change. Nevertheless, there is a scarcity of studies investigating how carbon emissions decouple from FD . Here, we investigate the relationship between FD and carbon emissions by using the decoupling model based on cross-province data of China during 2000–2019. Then, we use the decomposition method to analyze the nine drivers of decoupling elasticity of FD and CO 2 emissions. We found that China experienced weak decoupling and strong negative decoupling in most years. Only the finance develops at a very high level; the FD had spare capacities to promote the reduction in the carbon emissions. For example, several developed provinces (e.g., Tianjin, Zhejiang, Guangdong) realized strong decoupling after 2012. The reduction in energy intensity and the increase of foreign direct investment promoted the decoupling of FD from carbon emissions. During the financial recession period, developing a bank-based financial market helped the emissions reduction. Once financial crisis is overcome, developing a market-based financial market promoted the decoupling of FD from emissions. This is because that with the fast FD , the development of stock market contributed to emission reductions through technological improvement, while the bank loans inhibited the decoupling process through the expansion of capital-labor inputs. Overall, these results help in the assessment of the emissions impacts of FD and in addressing climate change problems.

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Role of financial development for sustainable economic development in low middle income countries

Cited by 76 publications

References 70 publications

Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method

Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method

Technological advancement and regulatory quality

A nexus study of carbon emissions and financial development in China using the decoupling analysis

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