Exploring the nexus between tax revenues, government expenditures, and climate change: empirical evidence from Belt and Road Initiative countries

Peng Yuelan (), Muhammad Waqas Akbar (), Zeenat Zia () and Muhammad Imran Arshad ()
Additional contact information
Peng Yuelan: Shanxi Institute of Economics Management
Muhammad Waqas Akbar: Shanxi University of Finance and Economics
Zeenat Zia: Shanxi University of Finance and Economics
Muhammad Imran Arshad: Virtual University

Economic Change and Restructuring, 2022, vol. 55, issue 3, No 4, 1365-1395

Abstract: Abstract The greenhouse gas (GHG) emissions generated by human activities are the leading cause of rapid climate change. High energy consumption projects in the BRI initiative have more impact on the environment. Therefore, fiscal policy instruments are essentials to combat climate change. This paper explores the impact of fiscal policy instruments, FDI, energy use, and GDP on climate change in Belt and Road Initiative (BRI) countries. The study utilizes fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS) long-run econometric models to estimate the long-run results in the full panel and individual countries. Furthermore, Dumitrescu and Hurlin’s (2012) causality test has been utilized to observe the short-run causalities among variables. The empirical findings confirmed that fiscal policy instruments expressively help to mitigate climate change, while foreign direct investment significantly intensifies the climate change in BRI. The short-run heterogeneous causality endorses bidirectional causality between fiscal policy instruments and climate change. It suggests that policy-makers should consider fiscal policy instruments to mitigate climate change in the BRI countries.

Keywords: Belt and Road Initiative; Climate change; FDI; Government expenditures; Tax revenues (search for similar items in EconPapers)
JEL-codes: H2 Q28 Q4 Q54 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10644-021-09349-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:ecopln:v:55:y:2022:i:3:d:10.1007_s10644-021-09349-1

Ordering information: This journal article can be ordered from
http://www.springer. ... nt/journal/10644/PS2

DOI: 10.1007/s10644-021-09349-1

Access Statistics for this article

Economic Change and Restructuring is currently edited by George Hondroyiannis

More articles in Economic Change and Restructuring from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().