Financial instability and CO2 emissions: cross-country evidence

Yang, Bo; Ali, Minhaj; Nazir, Muhammad Rizwan; Ullah, Wajeeh; Qayyum, Muhammad

doi:10.1007/s11869-020-00809-7

Cited by 62 publications

(45 citation statements)

References 54 publications

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“…In this sense, Jiang and Ma (2019) argued that financial development degrades the environmental quality by providing funds/loans to the individual that enhances the buying of energy-intensive appliances i.e., automobiles and other equipment. These results are consistent with the finding of Al-Mulali et al 2015, Shahbaz et al (2016), Bekhet et al (2017), Yang et al (2020aYang et al ( , 2020b, and Lu (2018) and confirmed that financial development enhances the environmental degradation. This outcome of the paper suggests that financial development could improve the environmental quality in BICS economies by channelizing investment/funds for those enterprisers that take green technologies.…”

Section: Results Of Long-run Elasticity Estimatessupporting

confidence: 92%

Remittance inflows affect the ecological footprint in BICS countries: do technological innovation and financial development matter?

Yang

Jahanger

Ali

2021

Environ Sci Pollut Res

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204

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This study examines the impact of remittance inflows, technological innovations, and financial development on environmental quality in Brazil, India, China, and South Africa (BICS) economies over 1990-2016. This study employed a comprehensive environment proxy, i.e., ecological footprint for environmental quality, and also considers more advanced and robust econometric (second-generation) techniques. The outcomes of the current study reveal that remittance inflows and financial development significantly deteriorate the environmental quality, while technological innovations are an essential factor for the reduction of ecological footprint level. Furthermore, the results of the interaction terms show a significantly adverse effect on the ecological footprint. Additionally, the findings of country-wise analysis reveal that remittance inflows and financial development worsen the environmental quality in each sample country, while the technological innovations promote the environmental sustainability that is steady with panel results. Besides, the environmental Kuznets curve (EKC) hypothesis was verified across the BICS economies. Consistent with the key findings, an inverted U-shaped relationship exists between economic growth and ecological footprint in the case of Brazil and South Africa. In contrast, the U-shaped EKC hypothesis exists in the case of China and India. For robust policy implication, the findings of this study highlighted the dire need for "green policy tools" that should be linked with the BICS economy policies and driver for sustained growth.

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Section: Results Of Long-run Elasticity Estimatessupporting

confidence: 92%

Remittance inflows affect the ecological footprint in BICS countries: do technological innovation and financial development matter?

Yang

Jahanger

Ali

2021

Environ Sci Pollut Res

Self Cite

204

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“…The stability between economic progress and environmental protection is essential for ecological development. Since environmental degradation, financial instability, and income inequality are the most critical issues nowadays, it has increased importance in the relationship between these factors [10,16,49,50]. Several environmental measures such as biodiversity, water and soil pollution, CO 2 emission, nitrogen oxide (NOx), and sulfur dioxide (SO 2 ) emission have been utilized in this subject.…”

Section: Empirical Literaturementioning

confidence: 99%

“…The range of research works in the literature is diverse from one another. The research studies focused on data availability, in some cases concentrated on single countries, whereas several studies tried cross-country analysis [3,10,16,33,46,50]. Therefore, to investigate the nexus among environmental degradation, financial instability, and income inequality, studies can be estimated in two groups.…”

Section: Empirical Literaturementioning

confidence: 99%

“…They found an insignificant influence of financial instability on CO 2 emissions. Recently, Yang, Ali, Nazir, Ullah, and Qayyum [50] analyzed the nexus between financial instability and CO 2 emission in 54 emerging economies cover the period 1980-2016. The outcomes of the study revealed that a decrease in financial instability would increase the performance of the environment.…”

Section: Empirical Literaturementioning

confidence: 99%

“…Regarding the financial instability, we develop a composite financial instability index (FIS) with the support of four financial market-based and bank-based indicators: (1) domestic credit to the private sector (DOP), (2) domestic credit to the banking sector (DOB), (3) liquid liabilities (LLS), and (4) broad money (BMY) [16,50]. The data of these variables are taken from the famous World Development Indicators (WDI) of the World Bank.…”

Section: Datamentioning

confidence: 99%

See 2 more Smart Citations

Income Inequality and CO2 Emissions in Developing Countries: The Moderating Role of Financial Instability

et al. 2020

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This paper studies the effects of income inequality and financial instability on CO2 emissions in the presence of fossil fuel energy, economic development, industrialization, and trade openness. Moreover, the present study is the first to examine the moderating role of financial instability between income inequality and CO2 emissions. We utilized panel data of forty-seven developing countries for the period 1980–2016 by utilizing the stochastic impacts by regression on population, affluence, and technology (STIRPAT) model. The empirical outcomes in all models indicate that income inequality and industrialization significantly reduce environmental degradation, while fossil fuel, trade openness, and economic growth decrease the quality of the environment. However, financial instability (with interaction term) shows no significant link to environmental quality, whereas (with interaction term) it shows a significant negative effect on CO2 emissions. In addition, the result of the interaction variable reveals that an increase in inequality, ceteris paribus, in combination with the rise in financial instability, is expected to increase pollution. Furthermore, there exists a bidirectional causal association among income inequality, financial instability, fossil fuel, trade openness, industrialization, economic growth, and the interaction variable with CO2 emissions.

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Does financial stability matter for environmental degradation?

Kırıkkaleli

Sofuoğlu

2023

Geological Journal

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There is a body of evidence that financial development contributes to the quality of the environment, either positively or negatively. However, a limited number of studies consider the effect of financial stability or financial risk on environmental degradation. As part of the proposed research, the present study contributes to the existing literature on asymmetric financial stability's impact on Ireland's environmental quality, as a major gap needs to be added to the literature. Based on this aim, the present study explores the effect of financial stability on environmental degradation in Ireland while controlling primary energy consumption, economic growth, and renewable energy in Ireland. The study employs a novel Fourier autoregressive distributed lag model (FARDL) approach for Ireland, covering the period 1990Q1‐2019Q4 with quarterly data. FARDL cointegration test results indicate a long‐term relationship between financial stability, primary energy consumption, renewable energy consumption, and CO2 emissions. The outcomes from the long‐term coefficient estimation model based on the FARDL model reveal that (i) financial stability leads to a decrease in environmental degradation in Ireland; (ii) renewable energy consumption promotes environmental sustainability; (iii) primary energy consumption has a negative effect on Ireland's environmental quality. These results denote that Ireland should enhance financial stability and promote renewable energy to reduce fossil fuel consumption to achieve net‐zero targets by 2050. Ireland to implement long‐term financial stability policies to fill the emission gap and achieve a net zero emissions target by 2050. Specific policy recommendations for Ireland's environmental policies are also discussed in the study.

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Financial instability and CO2 emissions: cross-country evidence

Cited by 62 publications

References 54 publications

Remittance inflows affect the ecological footprint in BICS countries: do technological innovation and financial development matter?

Remittance inflows affect the ecological footprint in BICS countries: do technological innovation and financial development matter?

Income Inequality and CO2 Emissions in Developing Countries: The Moderating Role of Financial Instability

Does financial stability matter for environmental degradation?

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