Reconciling Regional Differences in Financial Development and Carbon Emissions: A Dynamic Panel Data Approach

Xiong, Ling; Tu, Zhiyong; Ju, Lan

doi:10.1016/j.egypro.2017.03.716

Cited by 55 publications

(33 citation statements)

References 12 publications

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“…Some of them indicated that some financial variables could reduce CO 2 emissions in emerging economies only when greater degrees of liberalization and financial sector development are achieved [6]. Similar results were found in the case of China: Between 1997 and 2011, the level of financial development was correlated with a reduction of CO 2 emissions in the developed regions and an increase of emissions in the less-developed ones [48]. Overall, financial development has received an increased attention in both empirical and theoretical analyses regarding environmental degradation.…”

Section: Literature Reviewmentioning

confidence: 53%

“…Thirdly, financial development might increase the number and scale of manufacturing activities, which would lead to an increase in land degradation, pollution, and carbon emissions [49]. The last approach refers to the fact that financial development injects more money into the economy, which will increase the consumption and, consequently, the energy demand for producing goods and services [48].…”

Section: Literature Reviewmentioning

confidence: 99%

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Financial Development and CO2 Emissions in Post-Transition European Union Countries

2020

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Carbon dioxide emissions are on the rise, posing a serious global issue. Therefore, it is important that policymakers identify the exact causes of these emissions. This paper investigates the influence of financial development, primary energy consumption, and economic growth on CO2 emissions in 11 post-transition European economies. The assessment was made for the 1995–2017 period using panel cointegration and causality analyses. The causality analyses did not reveal significant connection between financial sector development and CO2 emissions, but rather a two-way causality between primary energy consumption and economic growth, on one hand, and CO2 emissions on the other. Meanwhile, long-run analysis disclosed that financial sector development and primary energy consumption positively affected CO2 emissions. Our results seek to grab the attention of policy makers, who could work towards creating country-specific strategies that balance the relationship between financial development and CO2 emissions. These long-term policies could ensure both development of the financial sector and environmental protection.

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Section: Literature Reviewmentioning

confidence: 53%

Section: Literature Reviewmentioning

confidence: 99%

Financial Development and CO2 Emissions in Post-Transition European Union Countries

2020

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“…Xiaong et al [20] investigated the regional differences in the effects of FMD on emissions on a panel dataset from China. It is mentioned that parts of China that are already well developed could reduce emissions with more financial development while for other less developed regions in the country, financial development tends to increased emissions, leading to environmental degradation.…”

Section: Theoretical and Empirical Frameworkmentioning

confidence: 99%

“…This insignificant effect of trade is questionable as most of the East Asian countries are export-oriented in the industrialized product. Xiaong et al [20] have tested the effect of FMD on CO 2 emissions in a single country case of China, but no study has yet tested the effect of FMD in a panel of East Asia. Additionally, the role of spatial dependency is something that is scant in the empirical environment literature; although, a good number of studies have investigated the spatial effects in the provinces or cities of China [1,2,[5][6][7][8][21][22][23][24][25][26][27].…”

Section: Introductionmentioning

confidence: 99%

Environmental Accounting of Financial Development and Foreign Investment: Spatial Analyses of East Asia

Mahmood

Furqan²,

Bagais

2018

Sustainability

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This paper aspires to examine the environmental effects of financial market development (FMD), foreign direct investment (FDI), and trade openness on the CO 2 emissions per capita along with the environmental Kuznets curve (EKC) hypothesis in six East Asian countries from 1991-2014. For this purpose, spatial econometrics is applied to consider the spillover effects from neighboring countries. The results of the study corroborate the spillover effects from neighboring countries' CO 2 emissions per capita, FMD, FDI, and trade openness, and the EKC hypothesis is proven true in this region. Local FDI inflows, trade openness, and energy intensity are found to be responsible for local environmental degradation. Local FMD has an insignificant environmental effect, but neighboring countries' FMD has contributed to the local CO 2 emissions per capita. Further, positive (negative) environmental spillover effects are found from neighboring countries' FDI (trade openness).

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“…Apergis et al [52] collected evidence from mixed regions and indicated an interconnection among energy practice, emissions, and income. Another data sample of high, middle and low-income countries displays an inverted U-shaped relationship between emissions and income economies and has supported the EKC theme [53]. Regarding EKC, the idea of the pollutionhavenhypothesis is worthy.…”

Section: Theoretical Backgroundmentioning

confidence: 84%

Unleashing the Indirect Influence of FDI in Environmental Degradation via Financial Development and Economic Growth. New Evidence from Asian Countries

Qamri

Bing

Khan

et al. 2020

Preprint

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Background:Scholars in developed and emerging economies have widely tested the interactions between foreign direct investment, financial development, economic growth and environmental degradation. Despite a number of empirical and review studies, it is not yet wrap up either the associations are negative, positive, direct or indirect. Additionally, minor attention is given to the indirect role of foreign direct investment in environmental degradation; perhaps no study has yet demonstrated the mediating role of financial development and economic growth between foreign direct investment and environmental degradation in Asian economies. Referring to the fragmented outputs and consequences as well as lacking the indirect role, the present study examines the influence of foreign direct investment on environmental degradation with the mediating role of financial development and economic growth. Results:Secondary data of 21 Asian countries from 1980-2018 were gathered from World Bank Indicators and then performed STATA to test the paths. Our findings are slightly different from the studies conducted in developed economies. The results indicate that foreign direct investment significantly improves environmental quality by deteriorating environmental pollution. It also significantly improves economic growth in the selected regions. Surprisingly, our study shows that foreign direct investment has a significant negative influence on financial development in the Asian regions. Both financial development and economic growth significantly negatively influence environmental degradation in Asian regions. However, financial development partially mediates while economic growth does not play any mediating role between foreign direct investment and environmental degradation in the Asian countries. Trade openness and population growth as control factors do not show any significant role in the model. Conclusions:This research recommends policymakers to focus on the inflow of foreign direct investment in order to enhance economic growth and environmental quality. It is strongly suggested for policymakers to attenuate the political intervention (e.g. ensure the political stability) in the inflow of foreign direct investment, so financial resources can be impartially distributed in the industrial sector and thus the nations will have an effective financial development system. Other implications have described.

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Reconciling Regional Differences in Financial Development and Carbon Emissions: A Dynamic Panel Data Approach

Cited by 55 publications

References 12 publications

Financial Development and CO2 Emissions in Post-Transition European Union Countries

Financial Development and CO2 Emissions in Post-Transition European Union Countries

Environmental Accounting of Financial Development and Foreign Investment: Spatial Analyses of East Asia

Unleashing the Indirect Influence of FDI in Environmental Degradation via Financial Development and Economic Growth. New Evidence from Asian Countries

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