The role of stock market and banking sector development, and renewable energy consumption in carbon emissions: Insights from G-7 and N-11 countries
Muhammad Wasif Zafar,
Syed Anees Haider Zaidi,
Ayfer Gedikli and
Resources Policy, 2019, vol. 62, issue C, 427-436
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.
Keywords: Carbon emissions; Stock market; Banking development; Renewable energy; Economic growth (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:62:y:2019:i:c:p:427-436
Access Statistics for this article
Resources Policy is currently edited by R. G. Eggert
More articles in Resources Policy from Elsevier
Bibliographic data for series maintained by Haili He ().