Asymmetric and time-varying linkages between carbon emissions, globalization, natural resources and financial development in China

Gao Ling (), Asif Razzaq (), Yaqiong Guo (), Tehreem Fatima and Farrukh Shahzad ()
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Gao Ling: Shanxi University
Asif Razzaq: Department of Business Administration ILMA University
Yaqiong Guo: Maastricht University
Tehreem Fatima: School of Economics and Management, East China Jiaotong University
Farrukh Shahzad: Guangdong University of Petrochemical Technology

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2022, vol. 24, issue 5, No 31, 6702-6730

Abstract: Abstract In the real world, economic covariates follow asymmetric and time-varying patterns. Therefore, it is imperative to integrate these effects while estimating environmental and economic relationships. Although prevailing literature reveals various emissions-deriving and eliminating factors, however, there is a dearth of empirical evidence that estimates the asymmetric and time-varying effect of globalization, natural resources, and financial development from a multidimensional perspective in China. In doing so, we employ the nonlinear autoregressive distributed lag (NARDL) and cross-wavelet modeling framework to explore the long- and short-run nonlinear and time-variant association between globalization, natural resources, financial development, and carbon emissions from 1980 to 2017. The NARDL method has the benefit of discriminating the long-term and short-term asymmetric carbon emission responses due to a positive and negative shock in our primary variables of interest. Mainly, the findings of NARDL estimations confirm that positive shocks in globalization and financial developments have a significant positive impact on carbon emissions, whereas negative shock in natural resources has a significant positive impact on carbon emissions. Similarly, the outcomes of continuous wavelet transformation and wavelet transformation coherence confirm the causal linkages between covariates; however, this effect varies across different time and frequency domains. These results imply that environmental researchers should consider asymmetric transmission channels and time–frequency associations among variables to devise long-term sustainable policies.

Keywords: Carbon emissions; Globalization; Financial development; Natural resources; Nonlinear ARDL; Wavelet approach (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10668-021-01724-2

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