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Validity of the environmental Kuznets Curve in Bangladesh under the role of financial development

Author

Listed:
  • Omor FARUQ

    (Bangladesh Bank, Bangladesh)

  • Sanaullah TALUKDER

    (Bangladesh Bank, Bangladesh)

  • Evanta Hashem KATHA

    (Bangladesh Bank, Bangladesh)

  • Mashrura Kabir SHAEBA

    (Bangladesh Bank, Bangladesh)

Abstract

This paper examines the EKC hypothesis for Bangladesh between 1974 and 2018. Using the ARDL model of bound testing method, we found the evidence of the long-term association between per capita CO2 emissions, per capita GDP, consumption of energy and financial development. Moreover, the results show that the EKC hypothesis holds true for Bangladesh during the study period. Furthermore, the coefficient of financial development is positive and significant, which suggests that financial development in Bangladesh comes at the cost of environmental degradation. Therefore, policies should be taken which will foster financial institutes for investing more in energy efficient and green energy projects or environmentally sustainable low carbon projects which are not pollution intensive.

Suggested Citation

  • Omor FARUQ & Sanaullah TALUKDER & Evanta Hashem KATHA & Mashrura Kabir SHAEBA, 2024. "Validity of the environmental Kuznets Curve in Bangladesh under the role of financial development," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(641), W), pages 195-212, Winter.
    • Handle: RePEc:agr:journl:v:xxxi:y:2024:i:4(641):p:195-212
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    Keywords

    EKC; Financial development; CO2 emissions; ARDL.;
    All these keywords.

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