Joint impact of stock market development and energy consumption on carbon dioxide emissions in Nigeria: 1990 to 2021

Nageri Kamaldeen Ibraheem (), Olukotun Abdulwaheed Adeola (), Lawal Saheed Oluwaseun () and Ibrahim Rahji Ohize ()
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Nageri Kamaldeen Ibraheem: Department of Finance, Al-Hikmah University, Ilorin, Nigeria; School of Economics, Finance and Banking, Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Olukotun Abdulwaheed Adeola: Department of Finance, Al-Hikmah University, Ilorin, Nigeria
Lawal Saheed Oluwaseun: Department of Economics, Al-Hikmah University, Ilorin, Nigeria
Ibrahim Rahji Ohize: Department of Finance, Al-Hikmah University, Ilorin, Nigeria

Financial Internet Quarterly (formerly e-Finanse), 2025, vol. 21, issue 2, 105-119

Abstract: Environmental degradation and global warming are two of the most pressing concerns facing the world today. This study examines the joint effects of stock market development and energy consumption on environmental degradation in Nigeria from 1990 to 2021. Utilizing the ARDL cointegration framework, the analysis reveals a long-run cointegration relationship among the variables at the speed of 124% towards long-run equilibrium. Carbon dioxide emission is positively and significantly influenced by stock market growth and energy consumption but negatively and insignificantly by the interaction of stock market and energy use. The control variables of foreign direct investment and trade openness have a negative impact on emissions while economic growth has positive impact on emission. The findings suggest that the adverse impacts of stock market growth and energy consumption on the environment require effective regulations, sustainable practices, and environmental protection with the use of renewable energy prioritized through the stock market and energy consumption agencies and policy makers. In the same vein, the Nigerian government should also prioritize policies aimed at reducing carbon dioxide emissions through the expansion of the trade sector and foreign direct investment because they play a crucial role in mitigating environmental degradation while it should promote sustainable economic growth that will encourage reduced carbon emission.

Keywords: Environmental Degradation; Stock Market Development; Energy Consumption; Carbon Dioxide Emissions; Nigeria; ARDL Cointegration (search for similar items in EconPapers)
JEL-codes: G10 O55 Q50 Q53 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:finiqu:v:21:y:2025:i:2:p:105-119:n:1007

DOI: 10.2478/fiqf-2025-0014

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