Vector error correlation modelling to examine the nexus of select economic factors on carbon-dioxide emissions in Ghana

Manjit Kour ()
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Manjit Kour: University School of Business Chandigarh University

SN Business & Economics, 2025, vol. 5, issue 5, 1-24

Abstract: Abstract Sub-Saharan Africa is a developing country and the rapid development happening of the region has led to an upsurge in demand for energy. The region is also receiving more foreign direct investment inflow. However, this economic development has also led to an increase in pollution and carbon emissions in particular. The main aim of this research is to empirically examine and provide evidence of the impact of industrial performance, foreign direct investment, fossil fuel consumption, and financial development on carbon-dioxide emissions in Ghana. The vector error correction model (VECM) is used to find the nexus between industrial performance, foreign direct investment, fossil fuel consumption, and financial development in terms of carbon-dioxide emissions. The study confirmed the presence of long-term equilibrium relationship and short-term relationships and short-term relationships between industrial performance, foreign direct investment, fossil fuel consumption, financial development and, carbon-dioxide emissions.

Keywords: VECM; Vector error correlation modelling; CO2 emissions; Pollution; environment; Sustainability; SSA region; Fossil fuels (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00814-x

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