The role of stock market and banking sector development, and renewable energy consumption in carbon emissions: Insights from G-7 and N-11 countries

By Muhammad Wasif Zafar, S. Zaidi, Avik Sinha, Ayfer Gedikli, Fujun Hou. Resources policy, 2019

239 citations recorded by the source corpus.

This study probes the role of disaggregated financial development and renewable energy in carbon emissions by incorporating gross fixed capital formation and economic growth in the function of carbon emissions. The financial development is measured through the stock market and banking sector development. We also examine the validity of the EKC hypothesis, using the data of G-7 and N-11 countries spanning from 1990 to 2016. The integration properties of the considered variables are examined through second generation unit roots tests. The Lagrange Multiplier (LM) bootstrap panel cointegration method has confirmed the long-run equilibrium relationship among the variables for all the four models used. The long-run elasticity results suggest that renewable energy increases environmental quality by reducing carbon emission intensity for both groups of panel countries. Banking development index decreases carbon emissions in G-7 countries, while increases carbon emissions in N-11 countries. Similarly, stock market development index increases carbon emissions in G-7 countries, while decreases in N-11 countries. Overall, economic growth and fixed capital formation impede environmental quality by accelerating the intensity of carbon emissions. This study suggests policy implications based on the empirical results for both groups of countries.

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

View Paper: https://www.semanticscholar.org/paper/e21fef952cffbb9401682861d97849b7fc06b25f

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

1. M. I. Shah
2. Kexiang Hu
3. Maozhi Chen
4. Xuejiao Ma
5. Avik Sinha
6. Muhammad Shahbaz
7. Tuhin Sengupta
8. Olimpia Neagu

In Renewable Energy, Sustainability and the Environment

1. Xuejiao Ma
2. M. I. Shah
3. Kexiang Hu
4. Maozhi Chen
5. Avik Sinha
6. Muhammad Shahbaz

Citations in the corpus

• How does tourism development affect environmental pollution? (2021, methodology): “Fifth, according to the STIRPAT model discussed above, we use population, GDP per capita and energy intensity as control variables, and they are known to influence CAR (Li et al., 2019; Pao et al., 2011; Sun, 2016; Zafar et al., 2019; Zhang et al., 2019b).”
• Impact of technological innovation on energy efficiency in industry 4.0 era: Moderation of shadow economy in sustainable development (2021, background): “Sinha (2016) and Zafar et al. (2019b) have given emphasis on the aspect of technological innovation, while considering the aspects of economic transformation in the emerging economies.”