The nexus between environmental degradation and industrial development in Pakistan and roles of financial development and fossil fuel

Ali, Muhammad; Gong, Zengtai; Asmi, Fahad; Zhou, Xue; Rizwanullah, Muhammad

doi:10.1002/ep.13621

Cited by 14 publications

(12 citation statements)

References 40 publications

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“…This EKC hypothesis was further validated by the interaction between infrastructure investment in the transportation system and environmental degradation of 21 OECD countries (Erdogan, 2020). Elsewhere, the dynamic link between Pakistan's CO 2 emissions and industrial development was examined for effectiveness, with the variables found to be co-integrated, involving both long-and short-term dynamics that validate the hypothesis (Ali et al, 2021).…”

Section: Relationship Between Industrial Pollution and Economic Growthmentioning

confidence: 88%

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Zhang

Han

Song

et al. 2023

Front. Environ. Sci.

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Unlike previous research on foreign direct investment (FDI), economic growth, and pollution, this study focuses on investigating complex interactions specifically. A dynamic simultaneous equation model is adopted, together with the one-step systematic GMM, drawn upon to empirically analyze 30 Chinese provinces between 2006 and 2017. The results show that FDI does promote economic growth in China which, in turn, positively affects FDI. However, FDI inflow and economic growth both have negative environmental effects. A higher level of environmental pollution corresponds with FDI becoming more attractive. In the case of China, therefore, the pollution-haven hypothesis holds weight. Specifically, industrial environmental pollution is found to positively affect economic growth, indicating this growth to fall on the left side of the environmental Kuznets Curve. Accordingly, therefore, policymakers should look to optimize China’s industrial structure, guide the inflow of high-quality FDI, and promote healthy and sustainable development under the country’s new development philosophy.

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Section: Relationship Between Industrial Pollution and Economic Growthmentioning

confidence: 88%

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Zhang

Han

Song

et al. 2023

Front. Environ. Sci.

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“…Correspondingly, Baek (2015) reported that there were weak evidences of the EKC relationship in Arctic countries. Ali et al (2021) investigated the validity of a dynamic connection between CO 2 and industrial growth employing ARDL model methods with structural breaks cointegration to capture the impact of fossil fuel consumption and economic growth on CO 2 emissions. All relevant factors were found to be cointegrated, and the long-term and short-term trends demonstrated the validity of the EKC hypothesis's inverted U -shaped connection between industrial growth and CO 2 , as founded by the Lind and Mehlum test.…”

Section: Literature Reviewmentioning

confidence: 99%

Fossil fuel, industrial growth and inward FDI impact on CO₂ emissions in Vietnam: testing the EKC hypothesis

Ullah

Nadeem

Ali

et al. 2021

MEQ

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PurposeIn this paper, the authors investigate that the increasing level of fossil fuel combustion in the industrial sector has been considered the prime cause for the emissions of greenhouse gas. Meanwhile, the research focusing on the impact of fossil fuel consumption on the emission of CO2 is limited for the developing countries containing Vietnam. This study applied the autoregressive distributed lag (ARDL) approach with structural breaks presence, and the Bayer–Hanck combined cointegration method to observe the rationality of the environmental Kuznets curve (EKC) hypothesis in the dynamic relationship between the industrialization and carbon dioxide (CO2) emission in Vietnam, capturing the role of foreign direct investment (FDI) inflows and the fossil fuel consumption over the period of 1975–2019. The outcomes revealed the confirmation of cointegration among the variables and both short and long-run regression parameters indicated the evidence for the presence of a U-shaped association between the level of industrial growth and CO2 emission that is further confirmed by employing the Lind and Mehlum U-test for robustness purpose. The results of Granger causality discovered a unidirectional causality from FDI and fossil fuel consumption to CO2 emission in the short run. For the policy points, this study suggests the use of efficient and low carbon-emitting technologies.Design/methodology/approachIn order to test for consistency and robustness of the cointegration analysis, this study also applied the ARDL bound testing method to find out long-run association among variables with the existence of the structural break in the dataset. The ARDL method was preferred to other traditional cointegration models; because of the smaller dataset, the results obtained from the ARDL method are efficient and consistent and equally appropriate for I(1) and I(0) variables.FindingsThe short-run and long-run causal associations among variables have been observed by employing the error correction term (ECT) augmented Granger-causality test that revealed the presence of the long-run causality among variables only when the CO2 emission is employed as a dependent variable. The outcomes for short-run causality indicated the presence of unidirectional causality between consumption of fossil fuel and CO2 emission, where the fossil fuel consumptions Granger-cause CO2 emission. Industrial growth has also been found to have an impact on fossil fuel consumptions, however not the opposite. This advocates that the policies aimed at reducing the fossil fuel consumptions would not be harmful to industrial growth as other energy efficient and cleaner technology could be implemented by the firms to substitute the fossil fuel usage.Originality/valueThe study explored the dynamic relationship among FDI, consumption of fossil fuel, industrial growth and the CO2 emission in Vietnam for the time period 1975–2019. The newly established Bayer–Hanck joint cointegration method and the ARDL bound testing were employed by taking into account the structural breaks in the dataset.

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“…Considering the both trade openness, industrial development and construction as independent variables in terms of testing the EKC hypothesis, there is no works by using two variables together. However, if those variables considered separately as independent variables, there are some researches (Adedoyin et al, 2022;Ali, et al, 2021;Li and Haneklaus, 2022;Zhou, et al, 2021) in the academic literature. While generating this part, besides examining the most recent work, researches on different economies are considered as well.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Although high-income countries are sensitive to environmental enhancement, it has been observed that insensitivity is high in middle and low-income countries. In addition, it is found that the increase in trade openness and per capita income negatively affected CO 2 emissions.When the subject is considered in terms of the relationship between industrial development and the EKC hypothesis,Ali et al (2021) perform ARDL model through structural breaks co-integration test to examine the existence of a dynamic relationship between industrial development and CO 2 by capturing the impact of fossil fuel usage and economic growth on Carbon emission. All variables have been discovered to be co-integrated and the short-run and long-run dynamics have demonstrated the existence of inverted U-shaped of the EKC hypothesis where there has been inverted U-shaped association between carbon emission and industrial development which had been established by Lind and Mehlum test as well.…”

mentioning

confidence: 99%

Testing the EKC Hypothesis in terms of Trade Openness, Industrial and Construction Development: Evidences from Northern European and Latin American Countries

Kayabas

2022

IJEEP

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The main research objective is to examine the long-run relationship between trade openness, industrial & construction development, economic growth, energy consumption, and ecological footprint by performing the Westerlund co-integration, FMOLS, DOLS, and CCR tests for Northern European (Denmark, Finland, Netherlands, Norway, and Sweden) and Latin American Countries (Argentina, Brazil, Chile, Colombia, and Uruguay) from 1980 to 2018. Considering the FMOLS, DOLS, and CCR test results of Northern European countries the EKC hypothesis is not confirmed for Finland, Norway and Sweden except Denmark and Netherlands. There is a long-run relationship among industrial & construction development, economic growth, and ecological footprint for both Denmark and Netherlands which verifies the EKC hypothesis from 1980 to 2018. When the remaining countries are examined, the results are opposite. There is no long-run relationship among relevant variables for Finland, Denmark, and Sweden from 1980 to 2018. Besides, there is no effect of industrial & construction development, economic growth, energy consumption, and trade openness on ecological footprint for Finland, Denmark, and Sweden from 1980 to 2018. The EKC hypothesis is not confirmed for Latin American countries as well. Similar results are obtained by using the same variables and other models including FMOLS, DOLS, and CCR for all Latin American countries. The pollution problem in question is of particular concern to developed countries. Because, these countries are forced to use heavy industry, which is far from the nano-technological industry structure and has high environmental degradation. In this context, Denmark should build an artificial island as a precaution against the climate crisis. Another main recommendation is Dutch government should build hydrogen heated homes in order to wage a fight against air pollution.

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The nexus between environmental degradation and industrial development in Pakistan and roles of financial development and fossil fuel

Cited by 14 publications

References 40 publications

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Fossil fuel, industrial growth and inward FDI impact on CO₂ emissions in Vietnam: testing the EKC hypothesis

Testing the EKC Hypothesis in terms of Trade Openness, Industrial and Construction Development: Evidences from Northern European and Latin American Countries

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The nexus between environmental degradation and industrial development in Pakistan and roles of financial development and fossil fuel

Cited by 14 publications

References 40 publications

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Evaluation of the triangle-relationship of industrial pollution, foreign direct investment, and economic growth in China’s transformation

Fossil fuel, industrial growth and inward FDI impact on CO2 emissions in Vietnam: testing the EKC hypothesis

Testing the EKC Hypothesis in terms of Trade Openness, Industrial and Construction Development: Evidences from Northern European and Latin American Countries

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Fossil fuel, industrial growth and inward FDI impact on CO₂ emissions in Vietnam: testing the EKC hypothesis