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Does Financial Development Matter for Environmental Kuznets Curve in Russia? Evidence from the Autoregressive Distributed Lag Bounds Test Approach

Author

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  • Alexander Bass

    (Department of Financial Markets and Banks, Financial University under the Government of the Russian Federation, Moscow, Russia,)

  • Dmitry Burakov

    (Department of Banks, Monetary Circulation and Credit, Moscow State Institute of International Relations (MGIMO-University), Moscow, Russia,)

  • Max Freidin

    (Department of Marketing, Belarusian State Agricultural Academy, Mogilev region, Gorki, Belarus.)

Abstract

This study explores the relationship between carbon dioxide emissions and their main determinants, which include real income and energy consumption in Russia, employing data for the period 1990-2016. The hypothesis of financial development being an important determinant of environmental quality in Russia is also tested. For estimating the short-run and long-run relationships the ARDL bounds test approach is employed in this study. The results are consistent with the Environmental Kuznets Curve (EKC) hypothesis and show that the real income and energy consumption have a statistically significant positive impact on the carbon emission and its square has a significant negative effect on the carbon emissions both in the short-run and long-run. Financial sector is found to be significant determinant of carbon emission in Russia as well. The pairwise Granger causality test also reveals unidirectional causality running from financial development to the carbon emissions.

Suggested Citation

  • Alexander Bass & Dmitry Burakov & Max Freidin, 2019. "Does Financial Development Matter for Environmental Kuznets Curve in Russia? Evidence from the Autoregressive Distributed Lag Bounds Test Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 334-341.
    • Handle: RePEc:eco:journ2:2019-04-42
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    2. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Mansoor, Sadia & Sinha, Avik & Qin, Quande, 2022. "ICT and education as determinants of environmental quality: The role of financial development in selected Asian countries," Technological Forecasting and Social Change, Elsevier, vol. 177(C).

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    More about this item

    Keywords

    financial development; environmental Kuznets Curve; pollution; ARDL bounds test; carbon emission;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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