Financial stability, energy consumption and environmental quality: Evidence from South Asian economies

By S. Nasreen, Sofia Anwar, Ilhan Ozturk. 2017

384 citations recorded by the source corpus.

A few studies are found on the relationship between financial instability, energy consumption and environmental quality in energy economics literature. The current study is an endeavor to fill this gap by investigating the relationship between financial stability, economic growth, energy consumption and carbon dioxide (CO2) emissions in South Asian countries over the period 1980–2012 using a multivariate framework. Bounds test for cointegration and Granger causality approach are employed for the empirical analysis. Estimated results suggest that all variables are non-stationary and cointegrated. The results show that financial stability improves environmental quality; while the increase in economic growth, energy consumption and population density are detrimental for environment quality in the long-run. The results also support the environmental Kuznets curve (EKC) hypothesis which assumes an inverted U-shaped path between income and environmental quality. Moreover, the study found the evidence of unidirectional causality running from financial stability to CO2 emissions in two countries i.e. Pakistan and Sri Lanka. The findings of this study open up new insight for policy makers to design a comprehensive financial, economic and energy supply policies to minimize the detrimental impact of environmental pollution.

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

View Paper: https://www.semanticscholar.org/paper/a3b9456b2a3a920a7fd65d9795257c097a4d47f2

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Citations in the corpus

Does the inflow of remittances and energy consumption increase CO2 emissions in the era of globalization? A global perspective (2020, background): “…Lu (2018); Cetin et al. (2018); Bekhet et al. (2017) found that financial development can increase CO2 emissions, but some other scholars Zaidi et al. (2019); Saidi and Mbarek (2017); Omri et al. (2015) (Nasreen et al. 2017) have investigated that financial development could decrease CO2 emissions.”
The effects of globalization, energy consumption and economic growth on carbon dioxide emissions in South Asian countries (2021, result): “The findings of Liu and Dietz,13 Soytas and Sari,131 Tao et al.,14 Shahbaz et al.,84 Saboori and Sulaiman,132,133 Ahmed et al.,118,119 and Nasreen et al.22 are supported the results of this 119Khan et al. study.”
Financial development and environmental degradation: Do human capital and institutional quality make a difference? (2021, background): “Pata et al. (2020) also revealed that human capital and renewable energy enhance environmental quality, while natural resources stimulate ecological damage.”