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Are Trade Openness Drivers Relevant to Carbon Dioxide Emission? A Study of Emerging Economies

Author

Listed:
  • Shahida Suleman

    (Department of Economics and Finance, Sunway Business School (SBS), Sunway University, 47500 Selangor Darul Ehsan, Malaysia)

  • Mohamed Boukhris

    (College of Business Administration, Prince Mohammad bin Fahd University, Khobar, Saudi Arabia)

  • Umar Nawaz Kayani

    (College of Business, Al Ain University, Abu Dhabi, UAE)

  • Hassanudin Mohammad Thas Thaker

    (Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Kuala Lumpur, Malaysia)

  • Calvin W. H. Cheong

    (Department of Economics and Finance, Sunway Business School (SBS), Sunway University, 47500 Selangor Darul Ehsan, Malaysia)

  • Abduraawf Hadili

    (College of Business Administration, Prince Mohammad bin Fahd University, Khobar, Saudi Arabia)

  • Shehnaz Tehseen

    (Department of Management, Sunway Business School (SBS), Sunway University, 47500 Selangor Darul Ehsan, Malaysia)

Abstract

This research is focused on an in-depth analysis of the trade drivers that influence trade openness and their impact on carbon dioxide emissions, with a concentrated examination of emerging economies from 1995 to 2020. This examination is contextualized within the scope of various trade and environmental theoretical frameworks. In our analysis, we employed a range of advanced panel regression methods, including stepwise regression for model selection, as well as Fully Modified Ordinary Least Squares (FMOLS), Panel Ordinary Least Squares (Panel OLS), and Fixed Effects Model (FEM). The long-term patterns were evaluated using Johansen co-integration tests. Additionally, the study delves into the causal links between carbon dioxide emissions and the key drivers of trade, employing Granger causality tests for this purpose. Our findings disclose a complex web of relationships, both in the short and long term, between trade openness and carbon dioxide emissions, influenced by several key factors: (i) net inflows of foreign direct investment, (ii) trade reserves, (iii) per capita income, (iv) exchange rates, and (v) gross national savings.

Suggested Citation

  • Shahida Suleman & Mohamed Boukhris & Umar Nawaz Kayani & Hassanudin Mohammad Thas Thaker & Calvin W. H. Cheong & Abduraawf Hadili & Shehnaz Tehseen, 2024. "Are Trade Openness Drivers Relevant to Carbon Dioxide Emission? A Study of Emerging Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 183-196, March.
    • Handle: RePEc:eco:journ2:2024-02-18
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    More about this item

    Keywords

    Trade Openness; Trade Openness Drivers; Cointegration; Carbon Dioxide Emissions; Emerging Economies;
    All these keywords.

    JEL classification:

    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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