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supplementary.xlsx (17.65KB )
This version is not peer-reviewed
Submitted:
03 December 2024
Posted:
04 December 2024
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IPS Statistic (Levels) | IPS Statistic (First Difference) | LLC Statistic (Levels) | LLC Statistic (First Difference) | |
---|---|---|---|---|
Gha_per_person | -2.502845405** | -4.964768713** | -2.502845405** | -4.964768713** |
FDI | -1.503180219* | -7.618670237** | -1.503180219* | -7.618670237** |
GDP_per_capita | 0.077397281* | -3.735265451** | 0.077397281* | -3.735265451** |
KOF | -3.919361581** | -4.019112779** | -3.919361581** | -4.019112779** |
Variable cross_sectional_dependence_results | Statistic | P_Value |
---|---|---|
Gha_per_person | 7.104943697 | 1.20372E-12 |
FDI | 11.48649614 | 1.54242E-30 |
GDP_per_capita | 17.22569383 | 1.70372E-66 |
KOF | 16.92342036 | 3.0235E-64 |
Variable | Coefficient estimation | The standard error | t-statistics | p-value | Value |
---|---|---|---|---|---|
Constant | 6.8679 | 0.78465 | 8.7529 | 4.339e-15 | *** |
FDI | -1.7236 | 1.5836 | -1.0884 | 0.27819 | |
GDP_per_capita | 0.00051559 | 0.000054257 | 9.5027 | < 2.2e-16 | *** |
KOF | 0.070859 | 0.028408 | 2.4944 | 0.01372 | * |
mean_FDI | -0.14440 | 5.1264 | -0.0282 | 0.97757 | |
mean_GDP_per_capita | 0.00024937 | 0.00016427 | 1.5180 | 0.13115 | |
mean_KOF | -0.18384 | 0.040502 | -4.5390 | 1.162e-05 | *** |
Research | The Impact of Integration, Financial Development, and Economic Growth on the Environment |
---|---|
Xiao, Tan, Huang, Li & Luo (2022) (Xiao et al., 2022) | Regional integration reduced carbon emissions by transferring energy-intensive and heavily polluting enterprises to other regions and by improving the capability of regional enterprises to govern their gas emissions and utilize energy efficiently. |
Murshed, Ahmed, Kumpamool, Bassim & Elheddad (2021) (Murshed et al., 2021) | Both regional trade integration and renewable energy transition are found to jointly reduce carbon dioxide emissions in South Asia. The results also authenticate the existence of the environmental Kuznets curve hypothesis, while financial development and urbanization are found to boost carbon dioxide emissions only in the long run. |
Lv, Zhu, & Du (2024) (X. Lv et al., 2024) | Regional integration has a significantly positive impact on attaining a win–win situation in terms of economic growth and environmental protection. Inhibiting pollution transfer and promoting green transformation are crucial mechanisms by which regional integration can help strike a balance between economic growth and environmental protection. |
Qi, Liu, & Ding (2023) (Qi et al., 2023) | Regional integration can effectively reduce urban pollutant emissions and that the emission reduction effect of regional integration is characterized by significant heterogeneity at different pollution levels. The mechanism analysis showed that the green technology innovation effect of regional integration is an important mechanism for promoting urban emission reduction. |
Shah, AbdulKareem, Ishola & Abbas (2023) (Shah et al., 2023) | Renewable energy consumption has a negative impact on CO2 emissions while fossil fuel energy degrades the environment. For regional trade integration, its influence was not significant enough to offset CO2 emission. |
He, Wang, Danish & Wang (2018) (He et al., 2018) | Regional economic integration not only stimulates labour mobility, but also achieve scale economy, both of which may also influence carbon dioxide (CO2) marginal abatement costs through affecting energy consumption, CO2 emissions, productivity growth, and technical progress. Evolution of regional economic integration indeed contributes to the increase of CO2 marginal abatement cost at 5% significance level. |
Sheraz, Deyi, Mumtaz & Ullah (2022) (Sheraz et al., 2022) | Financial development significantly increases CO2 emissions and causes environmental degradation in BRI countries. However, renewable energy and globalization mitigate CO2 emissions and improve the quality of the environment. Institutional quality was positive in correlation with CO2 emission and indicates bad governance, corruption, weak bureaucracy, and improper implementation of environmental laws cause environmental degradation. Further, the study also reports a bidirectional relationship of financial development, renewable energy, and institutional quality with CO2 emissions and a unidirectional causality running from globalization to CO2 emissions in BRI countries. |
Li & Lin (2017) (Li & Lin, 2017) | Regional integration has significant and robust positive effects on energy and CO2emissions performance with over 70% of effects coming from artificial barriers, rather than geographical distance. International openness is also beneficial for promoting energy and CO2 emissions performance, but cannot substitute for regional integration because of China's specialization in energy-intensive manufacturing in the global economy. |
Tinoco-Zermeño (2023) (Tinoco-Zermeño, 2023) | The results confirm bidirectional causality between financial development and CO2, financial development and GDP, and primary energy consumption and CO2; and unidirectional from financial development to energy consumption and from electricity generation to CO2. We did not find evidence of a relationship between GDP and energy or CO2 emissions. |
Lv & Li (2021) (Z. Lv & Li, 2021) (Z. Lv & Li, 2021) | We found that a country's CO2 emissions could be influenced by the financial development of its neighbors. Specifically, the significantly negative spillover effect of financial development on CO2 emissions dominated the significant positive direct effect, thus suggesting a significant negative total effect. |
Das, Brown & McFarlane (2023) (Das et al., 2023) | The relationship between CO2 emissions per capita and financial development is cointegrating, with the direction of cointegration running from financial development to CO2 emissions. We find that positive and negative changes in financial development have asymmetric impacts on CO2 emissions in the long and short run. |
Zhao & Yang (2020) (Zhao & Yang, 2020) | In the long term, it exists that the two-way causality between regional financial development and CO2 emissions, whereas it's not true for the short term. The dynamic analysis results demonstrate that the regional financial development has significantly lagged inhibitory effects on CO2 emissions. |
Shahbaz, Solarin, Mahmood & Arouri (2013) (Shahbaz, Solarin, et al., 2013) | We establish the presence of significant long-run relationships between CO2 emissions, financial development, energy consumption and economic growth. The empirical evidence also indicates that financial development reduces CO2 emissions. Energy consumption and economic growth add in CO2 emissions. |
Bayar, Diaconu & Maxim (2020) (Bayar et al., 2020) | 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. |
Xu, Huang & An (2021) (X. Xu et al., 2021) | We find that financial development clearly affects CO2 emissions through three channels: industrialization, economic growth, and energy consumption. The impact of financial development on CO2 emissions changes from negative to positive as industrialization and energy consumption increase. Financial development has a positive impact on CO2 emissions when per-capita income is between $1100 and $8100 but a negative impact when per-capita income is less than $1100 or greater than $8100. The economic growth channel is the Granger cause of the energy consumption and technological progress channels, and vice versa. |
Batool, Raza, Ali & Abidin (2022) (Batool et al., 2022) | Results suggest that ICT and financial development positively contribute to the degradation of the environment in the long run, while their impact on CO2 emissions is insignificant in the short run. On the other hand, renewable energy consumption affects environmental quality positively in both the long run and short run. It is also examined that economic growth affects CO2 emissions positively but the squared economic growth reduces CO2 emissions which validates inverted U-shaped EKC hypothesis. The empirical findings of the Granger Causality test suggest unidirectional causality from ICT and financial development to CO2 emissions, while a bi-directional relationship is found among renewable energy and CO2 emissions. |
Xiong, Zhang, & Mo (2023) (Xiong, Zhang, et al., 2023) | Empirical results consistently indicate that financial development has the significantly positive effect on CO2 emissions per capita, but the impact is inverted U-shaped. These results provide new explanatory ideas for the inconsistent direction of the impact of financial development on carbon emissions in existing studies. Then, the technological innovation and industrial structure are intermediaries for financial development to reduce CO2 emissions per capita, while the economic scale is the opposite. |
Anwar, Sinha, Sharif, Siddique, Irshad, Anwar & Malik (2022) (Anwar et al., 2022) | The empirical evidence demonstrates that urbanization, financial development, and economic growth increase CO2 emissions, renewable energy consumption reduces CO2 emissions, and the impact of agriculture is insignificant. |
Xu, Baloch, Danish, Meng, Zhang & Mahmood (2018) (Z. Xu et al., 2018) | Empirical results indicate that financial development contributes to CO2 emissions and degrades environmental quality. The results also show that the role of globalization in environmental degradation is insignificant and that electricity consumption is the main culprit behind the growing CO2 emissions in Saudi Arabia. In addition, bidirectional causality exists between globalization and CO2 emissions in the long run, and financial development and CO2 emissions Granger-cause each other. |
Xiong, Zang, Feng & Chen (2023) (Xiong, Zang, et al., 2023) | Empirical results consistently indicate that the effect of China's financial development on CO2 emissions per capita is significantly negative, and it also presents an inverted U-shaped pattern. |
Maji, Habibullah, & Saari (2017) (Maji et al., 2017) | The long-run results reveal that financial development increases CO2 emissions from the transportation and oil and gas sector and reduces CO2 emissions from manufacturing and construction sectors. However, the elasticity of financial development is not significant in explaining CO2 emissions from the agricultural sector. The results for short-run elasticities were also consistent with the long-run results. |
Szymczyk, Şahin, Bağcı & Kaygın (2021) (Szymczyk et al., 2021) | This assessment finds positive relationships between economic growth, energy consumption, and the urban population, and CO2 emissions. Moreover, it is put forward that a negative and significant relationship between financial development and CO2 emissions exists. Despite displaying a similar negative correlation, the relationship between trade openness and CO2 emissions is insignificant. |
Shahbaz, Hye, Tiwari & Leitão (2013) (Shahbaz, Hye, et al., 2013) | The empirical findings indicate that economic growth and energy consumption increase CO2 emissions, while financial development and trade openness compact it. The VECM causality analysis has shown the feedback hypothesis between energy consumption and CO2 emissions. Economic growth and CO2 emissions are also interrelated i.e. bidirectional causality. Financial development Granger causes CO2 emissions. |
Usman, Makhdum & Kousar (2021) (M. Usman et al., 2021) | The results of augmented mean group (AMG) estimation approach revealed that financial development, renewable energy and trade openness significantly contribute to overcome the environmental degradation, while economic growth and non-renewable energy utilization are more responsible for the environmental damages. Moreover, in growth function, financial development, renewable and non-renewable energy utilization significantly promote the economic growth. |
Danish, Hassan, Baloch, Mahmood & Zhang (2019) (Danish et al., 2019) | The ARDL econometric approach reveal that economic growth increases ecological footprint that contributes to environmental degradation. In addition, biocapacity also increases the ecological footprint and contributes to environmental degradation. A causality analysis suggests there is no causality regarding the relationship between economic growth and the ecological footprint. |
Ahmed, Zhang & Cary (2021) (Ahmed et al., 2021) | The long-run empirical results of symmetric ARDL suggest that economic globalization and financial development increase footprint in Japan. On the flipside, the novel findings from the asymmetric ARDL indicate that positive and negative changes in economic globalization reduce footprint. A positive change in financial development increases footprint with a more pronounced effect in the long-run, compared to a negative change which has a comparatively weak effect. Energy consumption deteriorates the environment by increasing the ecological footprint. On the positive side, population density decreases footprint, and the inverted U-shaped relationship between footprint and income confirms the validity of the EKC in Japan. |
Makhdum, Usman, Kousar, Cifuentes-Faura, Radulescu & Balsalobre-Lorente (2022) (Makhdum et al., 2022) | The ARDL outcomes reveal that institutional quality and renewable energy utilization greatly diminish ecological footprint. At the same time, other prospective indicators such as financial expansion and natural resources significantly enhance ecological footprint levels in the short- and long-run. Furthermore, institutional quality, financial expansion, renewable energy, and natural resources significantly trigger economic growth. Besides this, this study has revealed the unidirectional causal association from institutional quality and financial expansion to ecological footprint. In contrast, bidirectional causality occurs between renewable energy, natural resources, ecological footprint, and economic growth. |
Shahbaz, Dogan, Akkus & Gursoy (2023) (Shahbaz et al., 2023) | Financial development, economic growth, and non-renewable energy consumption negatively affect environmental quality by increasing ecological footprint. On other hand, the effect of trade openness on ecological footprint is found to be statistically insignificant. In addition, according to the panel causality test results, a unidirectional causality from financial development to ecological footprint is found while bidirectional causality between economic growth and ecological footprint exists. |
Çakmak & Acar (2022) (Çakmak & Acar, 2022) | Our findings demonstrate that; a) renewable energy consumption does not influence and is not a cause of the ecological footprint, b) economic growth is a cause and has an influence on the ecological footprint for most oil-producing countries. It has been found out that a 1% increase in economic growth will increase the ecological footprint by 0.02828%. |
Javeed, Siddique & Javed (2023) (Javeed et al., 2023) | The results of FM-OLS show that with a 1% increase in economic growth, globalization, biocapacity, and population density the ecological footprint increases by 0.55%, 0.08%, 0.06%, and 0.03%, respectively. However, renewable energy improves the environment by 0.04%. The Granger causality analysis revealed a bidirectional causality between ecological footprint and globalization and between ecological footprint and energy intensity. |
Ahmad, Jiang, Majeed, Umar, Khan & Muhammad (2020) (Ahmad et al., 2020) | Cointegration results confirm a stable, long-run relationship between the ecological footprint, natural resources, technological innovations, and economic growth. In the long run, natural resources and economic growth increase and expand the ecological footprint, while technological innovations are helpful in abating environmental degradation that takes place a result of this phenomenon. Furthermore, the quadric term for economic growth showed a negative impact on the ecological footprint, i.e., in the presence of the Environment Kuznets Curve (EKC) hypothesis. |
Wang, Yan & Zhao (2022) (X. Wang et al., 2022) | It is further found that the CO2 emission significantly positively derives the ecological footprint in short run while the economic growth significantly negatively affects the ecological footprint in short run. It means that the CO2 emission is a positive short-range as well as long-range deriver of ecological footprint while the economic growth is a negative short-term and long-range predictor of ecological footprint in China. However, the non-renewable energy consumption has not been supported as the significant deriver of ecological footprint, neither in short range nor in long range. |
Ahmad, Jiang, Murshed, Shehzad, Akram, Cui & Khan (2021) (Ahmad et al., 2021) | The overall findings show that financial globalization and eco-innovation reduce the ecological footprints, while urbanization stimulates environmental degradation by boosting the ecological footprints. Besides, the relationship between economic growth and ecological footprints is found to be inverted U-shaped. Hence, the Environment Kuznets Curve hypothesis is found to hold in the case of the G7 countries. |
Usman, Alola & Sarkodie (2020) (O. Usman et al., 2020) | The empirical results divulged that a decline in environmental degradation can be attributed to an increase in renewable energy consumption through its negative effects on ecological footprint. Economic growth and biocapacity were found to exert upward pressure on ecological footprint; however, trade policy exerts downward pressure on ecological footprint. A two-sided causal relationship was established between economic growth and ecological footprint as well as economic growth and biocapacity. In contrast, a one-way causality was confirmed running from trade policy to renewable energy consumption and from renewable energy consumption to biocapacity. The innovative accounting revealed that 14.79% and 8.41% of renewable energy consumption and trade policy caused 0.60% and 9.88% deterioration in the environment. |
Statistics | Gha_per_person | FDI | GDP_per_capita | KOF |
---|---|---|---|---|
Moran's I | -0.00694 | -0.00394 | -0.0023344 | -0.00153433 |
p-value | 0.000 | 0.000 | 0.000 | 0.000 |
Variables | FDI | GDP_per_capita | KOF | mean_FDI | mean_GDP_per_capita | mean_KOF |
---|---|---|---|---|---|---|
FDI | 1.0000 | 0.8031 | 0.6693 | 0.3615 | 0.3358 | 0.3405 |
GDP_per_capita | 0.8031 | 1.0000 | 0.5819 | 0.4527 | 0.4873 | 0.4522 |
KOF | 0.6693 | 0.5819 | 1.0000 | 0.8116 | 0.7996 | 0.8616 |
mean_FDI | 0.3615 | 0.4527 | 0.8116 | 1.0000 | 0.9290 | 0.9420 |
mean_GDP_per_capita | 0.3358 | 0.4873 | 0.7996 | 0.9290 | 1.0000 | 0.9280 |
mean_KOF | 0.3405 | 0.4522 | 0.8616 | 0.9420 | 0.9280 | 1.0000 |
Variable | VIF |
---|---|
FDI | 8.876 |
GDP_per_capita | 4.598 |
KOF | 14.137 |
mean_FDI | 12.153 |
mean_GDP_per_capita | 10.011 |
mean_KOF | 21.334 |
Variable | Coefficient estimation | The standard error | t-statistics | p-value | Value |
---|---|---|---|---|---|
FDI | -1.7236 | 1.7127 | -1.0064 | 0.31624 | |
GDP_per_capita | 0.00051559 | 0.00005868 | 8.7865 | 1.237e-14 | *** |
KOF | 0.070859 | 0.030723 | 2.3064 | 0.02279 | * |
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