Empirical Study on CO 2 Emissions, Financial Development and Economic Growth of the BRICS Countries

Fangjhy Li, Yang-Che Wu, Mei-Chih Wang, Wing-Keung Wong and Zhijie Xing
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Fangjhy Li: Department of Investment, School of Business, Wuchang University of Technology, No. 16, Jiangxia Avenue, Jiangxia District, Wuhan 430223, China
Yang-Che Wu: Department of Finance, College of Finance, Feng Chia University, No. 100 Wenhwa Rd., Xitun, Taichung 40724, Taiwan
Mei-Chih Wang: Chinese Social and Management Studies, Tunghai University, No.1727, Sec.4, Taiwan Boulevard, Xitun, Taichung 407224, Taiwan
Zhijie Xing: Department of Finance, School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiangxia District, Wuhan 430205, China

Energies, 2021, vol. 14, issue 21, 1-33

Abstract: This paper empirically examined relevant data on BRICS CO 2 emissions, financial development, and economic growth in the past 40 years, and analyzed the correlation between them. Using the cointegration test, it found that there is a clear correlation between the variables in China and South Africa, which show that there is a two-way relationship between CO 2 emissions, financial development, and economic growth in both countries. Using the quantile regression method in the analysis, the results demonstrated that at the 0.6th quartile, South Africa’s financial development had a negative impact on CO 2 emissions, while Brazil’s CO 2 emissions had a negative impact on financial development. Economic growth was subsequently added as a control variable, and the quantile-on-quantile regression method was used to test the correlation between the financial development of the BRICS countries and their CO 2 emissions. Finally, based on empirical conclusions, this paper proposed that BRICS countries should focus on sustainable economic development; when government departments formulate emission-reduction policies, they must reasonably consider the relationship between financial development and emission-reduction policies.

Keywords: BRICS countries; financial development; CO 2 emissions; economic growth; quantile on quantile regression (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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