Financial flows and environmental quality in ECOWAS member states: accounting for residual cross-sectional dependence and slope heterogeneity

Musah, Mohammed; Boateng, Frank; Kumah, Emmanuel Attah; Adebayo, Tomiwa Sunday

doi:10.1007/s10668-022-02755-z

Cited by 11 publications

(2 citation statements)

References 165 publications

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“…It measures commercial bank assets and equity capital affected by the overall GDP growth. Recent evidence on financial development shows that financial development has increased CO 2 E through two major channels (Adams & Klobodu, 2018; Adebayo, 2022; Musah et al, 2022; Rjoub et al, 2021). The development of the stock market can lower the cost of a financing loan, and (2) growth in fixed capital formation can allocate new company investments.…”

Section: Review Of the Related Literaturementioning

confidence: 99%

Energy productivity and environmental quality in Sweden: Evidence from Fourier and non‐linear based approaches

et al. 2023

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This study aims to examine the asymmetric and long‐run effects of energy productivity on the quality of the environment in Sweden. It covers the time series data from 1990Q1 to 2019Q4. Sweden was the first country in 1972 to host a United Nations conference on the environment. Unlike other countries in Europe, Sweden is cognizant of an innovative environment; it hopes to achieve 100% of its electricity from renewable sources by 2040 and lead the way towards a low‐carbon community. The novelty of this study lies in the thorough analysis of how energy productivity affects the quality of the environment in Sweden while controlling for economic growth, trade openness, and financial development utilizing the non‐linear ARDL approach and other robust econometric techniques. Precisely, (i) results indicate non‐linear and asymmetric effects of the variables over long‐term horizons; (ii) energy productivity benefits the environment by lowering CO2 emissions (CO2E) in the long term; (iii) a growth in trade openness positively impacts CO2E; (iv) an increase in financial development and economic growth without eco‐friendly protocols contribute to an increase in CO2E. The findings of this study support the economic theory that energy productivity can stimulate green living and green economic growth. We recommend that policymakers in Sweden invest in energy productivity, pursue R&D that embraces cleaner technologies, and prioritize cleaner, cross‐cutting eco‐friendly policies to combat climate challenges and achieve the long‐term climate policy goals of the EU.

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Section: Review Of the Related Literaturementioning

confidence: 99%

Energy productivity and environmental quality in Sweden: Evidence from Fourier and non‐linear based approaches

et al. 2023

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“…Some empirical studies have concluded a positive association between FDI and environmental pollution, which suggest a confirmation of the pollution haven hypothesis. Musah et al (2022) found that FDI is detrimental to ecological quality in the Economic Community of West African States (ECOWAS) member countries. Ajide et al (2023) thought that business climate which encouraging inflows of FDI, contributes to environmental degradation in developing economies.…”

Section: Literature Review 21 Fdi and Pollution Emissionsmentioning

confidence: 99%

Foreign direct investment and pollution emissions: a perspective from heterogeneous environmental regulation

Fu,

Long,

Sun

et al. 2023

MEQ

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PurposeThe purpose of this study is to analyze the effect of foreign direct investment (FDI) on pollution emissions and how environmental regulation affects this relationship.Design/methodology/approachIn the empirical research, the authors selected panel data for 30 provinces in China from 2005 to 2019 as samples. First, the authors used the instrumental variable method to verify the existence of the above hypotheses in China. Then, the authors analyzed the moderating effect of different types of environmental regulations on the environmental effects of FDI. Next, in further discussion, the authors analyzed the difference between the environmental effect and the moderating effect in different time periods and regions, respectively. Finally, the authors discussed whether the different intensities of environmental regulations lead to the transfer effect of FDI in choosing investment destinations.FindingsThe result shows that FDI can help reduce pollution emissions and create a “pollution halo” effect, which is enhanced by command-and-control regulation but suppressed by market-based incentives. The heterogeneity analysis reveals that the 18th National Congress of the Communist Party has weakened the pollution halo effect of FDI, while the environmental effect of FDI in the eastern region is not significant, but in the middle and western regions, there is a significant pollution halo effect and a positive moderating effect of environmental regulations. Finally, further analysis reveals that FDI has a transfer effect under command-and-control environmental regulations.Research limitations/implicationsFirst, the main purpose of this paper is to study the relationship between FDI and pollution emissions from the perspective of heterogeneous environmental regulation. Therefore, there is no detailed discussion on their effect mechanism of them. Second, limited by data, the authors adopt the single index to measure the stringency index of command-and-control and market-based incentive environmental regulations in China. The single index may not be able to fully reflect the intensity of regional environmental regulation, so the construction of a composite indicator is necessary. These shortcomings are the focus of the authors' future research.Practical implicationsUnder the guidance of high-quality development, the conclusions above can provide reference for adjusting FDI policies and improving environmental regulation policies.Originality/valueThe innovations in this paper can be summarized as the following four dimensions: First, the authors use the instrumental variable (IV) method to address endogeneity in the relationship between FDI and pollution emission, which can further ensure the robustness of the research results and increases the credibility of the paper. Second, the authors distinguish between two types of environmental regulations to investigate their moderating effect on the environmental impact of FDI. Third, the authors consider the temporal and spatial heterogeneity of both the environmental effects of FDI and the moderating effect of regulation. Last, the authors analyze the spatial spillover of environmental regulation through the study of the transfer effect.

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Business cycle synchronization and sustainable trade development in Africa: The role of capital mobility

Abendin,

Naatu,

Khan

et al. 2024

Sustainable Development

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The literature has overlooked the significance of business cycle synchronization in sustainable trade development, particularly with regard to trade‐adjusted carbon emissions. Further, how capital mobility affect the nexus between business cycle synchronization and sustainable trade development is an area that is yet to be explored. This paper examines the role of capital mobility in the nexus between business cycle synchronization and sustainable trade development using the panel corrected standard errors model in 30 African economies for the period 2006–2020, thus addressing the gaps in the previous studies. We concluded that: First, the direct effects of business cycle synchronization worsen sustainable trade development in Africa. Second, capital mobility promotes sustainable trade development in Africa. Third, capital mobility may be a viable instrument to mitigating the detrimental effects of synchronized business cycles on the sustainable trade development in Africa. Fourth, our research contributes to the extant literature by determining the threshold at which capital mobility can affect the association between synchronized business cycles and sustainable trade growth. Fifth, our study revealed that business cycle synchronization and capital mobility have a causal relationship with sustainable trade development in Africa. The concluding remarks section includes policy implications.

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Financial flows and environmental quality in ECOWAS member states: accounting for residual cross-sectional dependence and slope heterogeneity

Cited by 11 publications

References 165 publications

Energy productivity and environmental quality in Sweden: Evidence from Fourier and non‐linear based approaches

Energy productivity and environmental quality in Sweden: Evidence from Fourier and non‐linear based approaches

Foreign direct investment and pollution emissions: a perspective from heterogeneous environmental regulation

Business cycle synchronization and sustainable trade development in Africa: The role of capital mobility

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