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Economic policy uncertainty and carbon footprint: International evidence

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  • Tee, Chwee-Ming
  • Wong, Wai-Yan
  • Hooy, Chee-Wooi

Abstract

Economic policy uncertainty is an evolving area of research that may affect environmental issues such as the carbon footprint. However, from a global perspective, it is not known whether economic policy uncertainty is significantly related to it. Motivated by this gap in the literature, we investigate the impact of economic policy uncertainty on carbon footprint. Using a sample of 2782 firms from 60 countries, our cross-sectional regression analysis finds that economic policy uncertainty is positively associated with the carbon footprint. This applies to the total, direct, and indirect carbon emissions measurements. However, we find that countries with better institutional governance alleviate the significant association between economic policy uncertainty and carbon footprint.

Suggested Citation

  • Tee, Chwee-Ming & Wong, Wai-Yan & Hooy, Chee-Wooi, 2023. "Economic policy uncertainty and carbon footprint: International evidence," Journal of Multinational Financial Management, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:mulfin:v:67:y:2023:i:c:s1042444x2300004x
    DOI: 10.1016/j.mulfin.2023.100785
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    2. Md. Qamruzzaman, 2024. "Clarifying the Nexus between Trade Policy Uncertainty, Economic Policy Uncertainty, FDI and Renewable Energy Demand," International Journal of Energy Economics and Policy, Econjournals, vol. 14(2), pages 367-382, March.
    3. Yu, Yang & Jian, Xin & Wang, Hongxiang & Jahanger, Atif & Balsalobre-Lorente, Daniel, 2024. "Unraveling the nexus: China's economic policy uncertainty and carbon emission efficiency through advanced multivariate quantile-on-quantile regression analysis," Energy Policy, Elsevier, vol. 188(C).
    4. Guochang Fang & Kun Yang & Gang Chen & Xiaohang Ren & Farhad Taghizadeh-Hesary, 2023. "Exploring the effectiveness of fiscal decentralization in environmental expenditure based on the CO2 ecological footprint in urban China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
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    More about this item

    Keywords

    Economic policy uncertainty; Carbon emissions; Carbon footprint; Institutional governance;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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