Financial Institutional and Market Deepening, and Environmental Quality Nexus: A Case Study in G-11 Economies Using CS-ARDL

Usman Mehmood; Salman Tariq; Zia Ul Haq; Ephraim Bonah Agyekum; Solomon Eghosa Uhunamure; Karabo Shale; Hasan Nawaz; Shafqat Ali; Ammar Hameed

doi:10.3390/ijerph191911984

Financial Institutional and Market Deepening, and Environmental Quality Nexus: A Case Study in G-11 Economies Using CS-ARDL

Int J Environ Res Public Health. 2022 Sep 22;19(19):11984. doi: 10.3390/ijerph191911984.

Authors

Usman Mehmood^{1

2}, Salman Tariq³, Zia Ul Haq³, Ephraim Bonah Agyekum⁴, Solomon Eghosa Uhunamure⁵, Karabo Shale⁵, Hasan Nawaz¹, Shafqat Ali¹, Ammar Hameed¹

Affiliations

¹ Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Centre for Remote Sensing, University of the Punjab, Lahore 54590, Pakistan.
² Department of Political Science, University of Management and Technology, Lahore 54590, Pakistan.
³ Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Department of Space Science, University of the Punjab, Lahore 54590, Pakistan.
⁴ Department of Nuclear and Renewable Energy, Ural Federal University Named after the First President of Russia Boris Yeltsin, 19 Mira Street, Eka-Terinburg 620002, Russia.
⁵ Faculty of Applied Sciences, Cape Peninsula University of Technology, P.O. Box 652, Cape Town 8000, South Africa.

Abstract

This study presents a new insight into the dynamic relationship between financial institutional deepening (FID), financial deepening, financial market deepening (FMD), foreign direct investment (FDI), economic growth (GDP), population, and carbon dioxide emissions (CO₂e) in the G-11 economies by employing a cross-sectionally augmented autoregressive distributed lag (CS-ARDL) approach during 1990-2019. The outcomes from the CS-ARDL and dynamic common correlated effects mean group (DCCEMG) models shows that financial deepening, GDP, FDI, and population degraded environmental quality both in the short run and the long run. Contrary to this, FID and FMD improves environmental quality in these countries. The government should work to maximize financial institutions (access, depth, efficiency) and financial markets (access, depth, efficiency) to reduce the CO₂e. A strong positive and in-phase correlation of CO₂e with economic growth and population is observed for G-11 countries. These results suggest policy makers should further improve financial institutions by creating opportunities for their populations. Moreover, the governments of G-11 countries should revise their foreign direct investment policies and attention should be given to import efficient means of energy production.

Keywords: CS-ARDL; economic growth; financial deepening; foreign direct investment; wavelet coherence.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Carbon Dioxide*
Economic Development*
Government
Internationality
Investments

Substances

Carbon Dioxide

Grants and funding

The research funding from the Ministry of Science and Higher Education of the Russian Federation (Ural Federal University Program of Development within the Priority-2030 Program) is gratefully acknowledged: grant number: FEUZ-2022-0031.