The capital investment channel of environmental improvement: evidence from BRICS

Mesagan, Ekundayo Peter; Isola, Wakeel Atanda; Ajide, Kazeem Bello

doi:10.1007/s10668-018-0110-6

Cited by 36 publications

(34 citation statements)

References 43 publications

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“…This means that investment is not a significant determinant of environmental quality in Nigeria when we consider carbon emissions, but it has a substantial effect in lowering particulate emissions damage in the country. This result is at variance with Mesagan et al (2018), who confirmed that capital investment is an essential channel for improving environmental quality in BRICS. Also, the coefficient of urbanization suggests that it positively but insignificantly affects environmental degradation and CO 2 emissions, whereas it positively and significantly increases PM emissions in the study.…”

Section: Resultsmentioning

confidence: 56%

“…We include energy consumption as it is an essential determinant of environmental pollution in a location. Empirical studies such as Soytas et al (2007) and Mesagan et al (2018) opined that energy consumption has severe implications for environmental quality because it is crucial in the production process. Again, when trade openness increases in a country, it enables the country to gain access to improved technology for pollution abatement; the country also gains access to international capital markets for the inflow of investment, which has environmental implications too (Copeland and Taylor, 1994).…”

Section: Theoretical Justification For the Inclusion Of Variablesmentioning

confidence: 99%

“…As noted by Sadorsky (2014), when urbanization increases, economic activities expand, and pollution increases too. Meanwhile, Mesagan et al (2018) identified investment as an essential channel for improving environmental quality.…”

Section: Theoretical Justification For the Inclusion Of Variablesmentioning

confidence: 99%

“…Again, financial sector improvement can impact the environment by encouraging the private sector to increase investments in new technologies. This investment expansion boosts the volume of industrial energy consumption, which can either increase or decrease emissions of carbon depending on the energy mix (Mesagan et al, 2018). Also, the level of a country's financial development strongly determines the allocation of credit to investments that can enhance or reduce environmental quality.…”

Section: Introductionmentioning

confidence: 99%

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Determinants of Environmental Quality in Nigeria: Assessing the Role of Financial Development

Mesagan

Nwachukwu

2018

ERFIN

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In this study, we analyze the determinants of environmental quality in Nigeria, focusing on the role of financial development. It is a time series analysis covering the period from 1981 to 2016. The study uses the ARDL bounds testing approach to analyze data on urbanization, per capita income, environmental degradation, energy consumption, trade intensity, and capital investment. We generate the environmental degradation index using principal component analysis (PCA). Empirical results suggest that income, financial development, energy consumption, and trade are significant in explaining environmental quality, whereas investment and urbanization are insignificant in the model. Moreover, we find no causality between the capital investment, financial development, and environmental quality, although urbanization and income unidirectionally cause environmental degradation. Also, there exists a bidirectional causality between energy consumption and environmental degradation. Therefore, to ensure efficient credit allocation to low carbon emitting firms, financial sector operators should adequately screen investment proposals before committing funds to them.

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Section: Resultsmentioning

confidence: 56%

Section: Theoretical Justification For the Inclusion Of Variablesmentioning

confidence: 99%

Section: Theoretical Justification For the Inclusion Of Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Determinants of Environmental Quality in Nigeria: Assessing the Role of Financial Development

Mesagan

Nwachukwu

2018

ERFIN

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“…From the foregoing, it is clear that the literature is active regarding the role of financial development in the energy–growth–environment nexus but most of the studies rather focus on fossil energy rather than renewable energy whose propensity to influence environmental quality is high and has become a global consensus (see Al‐Mulali et al, 2015; Apergis & Ozturk, 2015; Kahia, Aissa, & Lanouar, 2017; Katircioglu & Katircioglu, 2018; Mesagan, Isola, & Ajide, 2018). Also, most of the studies that incorporate financial development in the energy–growth–environment nexus proxy it with either one of the two traditional measures of financial depth—ratio of money supply to GDP or ratio of private credit to GDP—or, at best, compute an index from other financial indicators using principal component analysis (see Al‐Mulali et al, 2015; Javid & Sharif, 2016; Ozatac, Gokmenoglu, & Taspinar, 2017; Shahbaz, Mahalik, Shah, & Sato, 2016).…”

Section: Introductionmentioning

confidence: 99%

Testing the nexus between renewable energy consumption and environmental quality in Nigeria: The role of broad‐based financial development

Iorember

Goshit

Dabwor

2020

African Development Review

114

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This study investigates the nexus between renewable energy consumption and environmental quality in Nigeria, accounting for the role of financial development, and reexamines the validity of the environmental Kuznet curve (EKC) hypothesis for Nigeria covering the period 1990 to 2016. To cover financial development more adequately, the current study uses the broad-based financial development index constructed by the International Monetary Fund. The study employs second generation econometric approaches of Lee and Strazicich, and Bayer and Hanck combined cointegration tests to check for stationarity and cointegration among the variables, and then applies autoregressive distributed lag (ARDL) and vector error correction model (VECM) Granger causality tests to explore the effect and causal relationship respectively. The results divulge that renewable energy consumption improves environmental quality, while financial development hurts the environment. Further, the results validate an inverted U-shaped association between economic growth and environmental degradation in Nigeria. The VECM Granger causality results indicate a long-run effect of the independent variables on CO 2 emission, while the short-run causality reveals a mixture of unidirectional and bidirectional causality among the variables. This study therefore recommends that policy makers consider the important roles of renewable energy and financial development in reforming energy policies to achieve environmental sustainability. K E Y W O R D S environmental quality, financial development, renewable Energy 1 | INTRODUCTION Environmental concerns have become prominent among economists and environmental experts in both developed and developing countries. These concerns which center on environmental sustainability are brought about by both natural factors and human (anthropogenic) activities of economic expansion. The prevailing global expert opinion is that expansion in economic activities is largely dependent on energy, given its central role in facilitating

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Income inequality and CO2 emissions: nonlinear evidence from Turkey

Öztürk

Çetin

Demir

2021

Environ Dev Sustain

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The capital investment channel of environmental improvement: evidence from BRICS

Cited by 36 publications

References 43 publications

Determinants of Environmental Quality in Nigeria: Assessing the Role of Financial Development

Determinants of Environmental Quality in Nigeria: Assessing the Role of Financial Development

Testing the nexus between renewable energy consumption and environmental quality in Nigeria: The role of broad‐based financial development

Income inequality and CO2 emissions: nonlinear evidence from Turkey

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