Impact of financial development, trade flows, and institution on environmental sustainability in emerging markets

Author:

Bekun Festus Victor12ORCID,Gyamfi Bright Akwasi3ORCID,Köksal Cihat4ORCID,Taha Amjad5

Affiliation:

1. Faculty of Economics Administrative and Social Sciences, Istanbul Gelisim University, Istanbul, Turkey

2. Adnan Kassar School of Business, Department of Economics, Lebanese American University, Beirut, Lebanon

3. School of Management, Sir Padampat Singhania University, Udaipur, Rajasthan, India

4. International Trade Department, Faculty of Business, İstanbul Ticaret University, Beyoglu, İstanbul, Türkiye

5. Banking and Finance Department, Eastern Mediterranean University, Famagusta, North Cyprus, Turkey

Abstract

The present study is motivated by the need to decouple economic growth from environmental degradation given the new wave of chase for higher economic growth trajectories comes with its environmental cost implications, especially among developing blocs like the Emerging 7 (E7) countries. There is a consistent trade-off between economic growth versus environmental quality. Government apparatus are perpetually on the chase for low-carbon emission policies via the pursuit for green economy. To this end, this present study extends the conventional environmental Kuznets curve (EKC) argument by incorporating the role of institution in emerging industrialized economies (E7) and using second-generation panel analysis methods like mean group (MG), augmented mean group (AMG), common correlated effects mean group (CCEMG), and the Dumitrescu and Hurlin causality test for more robust estimates and inferences. To this end, we explore the long-run and causality relationship between economic growth, quadratic form of economic growth, institutional quality, trade flow, investment in energy sector, and financial development in an EKC environment. Empirical analysis established a long-run equilibrium relationship among the outlined variables over the study period. The long-run regression shows the presence of EKC in the E7. Thus, suggesting the preference for GDP growth over environmental quality at the earlier stage of growth curve. Interestingly, investment in energy, trade flow dynamics across the blocs, and financial development dampens the detrimental effect of environmental pollution as we observed negative relationship with the ecological footprint. On the contrary, quality of institution is weak as institutional quality increase (worsen) the quality of environment in the E7 economies. From a policy perspective, this current study proposed the need for more stringent environmental treaties and regulations and promotion of green economy without compromising economic growth. In the conclusion part of the study, more details and specifics about the policy blueprint are presented.

Publisher

SAGE Publications

Subject

Energy (miscellaneous),Energy Engineering and Power Technology,Renewable Energy, Sustainability and the Environment,Environmental Engineering

Reference81 articles.

1. Does higher education system moderate energy consumption and climate change nexus? Evidence from a small island

2. Hawksworth J, Cookson G. The world in 2050. How big will the major emerging market economies get and how can the OECD compete, 2006. Available at Microsoft Word - World in 2050 update _long version_ - mar08.doc (mathsfi.com)

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3