Bitcoin trading, economic growth, energy use, and CO2 emissions: An advanced panel study of emerging market economies

Hui Hong and Cheng Zhang

International Review of Economics & Finance, 2023, vol. 87, issue C, 519-531

Abstract: Carbon dioxide emissions pose a severe threat to the global eco-system and human health, yet at the same time the exponential growth of Bitcoin trading, unsustainable mode of current economic development, and the low efficient energy usage have become burgeoning issues in emerging market economies. By applying advanced econometric techniques, this research empirically tests the dynamic impacts of Bitcoin trading, economic growth, and energy use on CO2 emissions in the top 20 Bitcoin-trading emerging market economies from 2013 to 2020, highlighting results on the existence of cross-section dependence, slope heterogeneity, and unit roots in the panel data. Moreover, Bitcoin trading, economic growth, and energy use have a significantly positive effect on CO2 emissions from a long-term perspective. Findings further show that CO2 emissions have a bi-causal correlation with all three determinants. Relevant implications are offered as follows. For academic researchers, cross-section dependence and slope heterogeneity are important considerations, and ignoring them would lead to significantly biased inferences. Emerging market governments should introduce eco-friendly technology for Bitcoin trading, modify the present extensive mode of economic growth, and guard against unsustainable energy consumption.

Keywords: Bitcoin trading; Economic growth; Energy use; CO2 emissions; Emerging market economies (search for similar items in EconPapers)
JEL-codes: B23 C23 Q56 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:87:y:2023:i:c:p:519-531

DOI: 10.1016/j.iref.2023.06.003

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