Financial Development, Environmental Quality, Trade and Economic Growth: What Causes What in MENA Countries

By Anis Omri, S. Daly, Christophe Rault, A. Chaibi. Social Science Research Network, 2015

745 citations recorded by the source corpus.

This paper examines the relationship between financial development, CO2 emissions, trade and economic growth using simultaneous-equation panel data models for a panel of 12 MENA countries over the period 1990-2011. Our results indicate that there is evidence of bidirectional causality between CO2 emissions and economic growth. Economic growth and trade openness are interrelated i.e. bidirectional causality. Feedback hypothesis is validated between trade openness and financial development. Neutrality hypothesis is identified between CO2 emissions and financial development. Unidirectional causality running from financial development to economic growth and from trade openness to CO2 emissions is identified. Our empirical results also verified the existence of environmental Kuznets curve. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development and to improve the environmental quality.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/02bd202847440c5ff1568333f805584fd825231f

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Citations in the corpus

Does financial development mitigate carbon emissions? Evidence from heterogeneous financial economies (2020, methodology): “The last group of the empirical studies also suggests that financial development has no relationship with carbon emissions (see Dogan & Turkekul, 2016; Maji, Habibullah, & Saari, 2017; Omri, Daly, Rault, & Chaibi, 2015).”
Financial development and environmental quality: The way forward (2016, background): “17 concern for the environmental rules and regulations that lead the deterioration in environment quality (Shahbaz, 2013). Energy consumption (positive and negative shocks) also adds to CO2 emissions. This empirical outcome is similar to those of Nasir and Rehamn (2011), Shahbaz et al. (2012), Ahmed”
The Moderating Effect of Institutional Quality on the Financial Development and Environmental Quality Nexus (2020, background): “Empirically, the financial development and environmental quality nexus has been examined in a number of developing countries, including Brazil, Russia, India and China (BRIC) countries [11], China [12–14], sub-Saharan African countries [15], Turkey [16], Indonesia [17], South Africa [18], Vietnam [1”
The Impact of Financial Development on Carbon Emissions: A Global Perspective (2019, methodology): “Although our conclusions were consistent with some research [22,23,28], they were quite different from other works [16,17,27].”