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Foreign trade, financial development, agriculture, energy consumption and CO2emission: testing EKC among emerging economies

Author

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  • Nitin Koshta
  • Hajam Abid Bashir
  • Taab Ahmad Samad

Abstract

Purpose - The main purpose of this study is to explore the presence of the EKC hypothesis in emerging economies. Additionally, the present study also explores the existence of the “resource curse hypothesis” (RCH), and the causal relationship among the variables that are considered for testing the presence of EKC and RCH hypothesis for a panel of selected emerging economies for the time period between 1990 and 2014. Design/methodology/approach - The authors performed unit root test followed by cointegration test to test the existence of cointegrating relationship among the variables. Dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) methods are used to obtain long-run estimates of considered variables, and the Granger causality test is performed to test the directional causality. Findings - The long-run estimates obtained from DOLS and FMOLS techniques support the presence of the EKC (inverted U-shape) and the RCH. Originality/value - To the best of the authors’ knowledge, the present work is the pioneer study for EKC and RCH investigation in the context of emerging economies. The policy implication is that these economies should look forward to drafting new policies to reduce environmental degradation and promote sustainable development.

Suggested Citation

  • Nitin Koshta & Hajam Abid Bashir & Taab Ahmad Samad, 2020. "Foreign trade, financial development, agriculture, energy consumption and CO2emission: testing EKC among emerging economies," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 14(1), pages 50-80, August.
    • Handle: RePEc:eme:igdrpp:igdr-10-2019-0117
    DOI: 10.1108/IGDR-10-2019-0117
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    Citations

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    Cited by:

    1. Khan, Samiha & Murshed, Muntasir & Ozturk, Ilhan & Khudoykulov, Khurshid, 2022. "The roles of energy efficiency improvement, renewable electricity production, and financial inclusion in stimulating environmental sustainability in the Next Eleven countries," Renewable Energy, Elsevier, vol. 193(C), pages 1164-1176.
    2. Xie, Qichang & Bai, Dingchuan & Cong, Xiaoping, 2022. "Modeling the dynamic influences of economic growth and financial development on energy consumption in emerging economies: Insights from dynamic nonlinear approaches," Energy Economics, Elsevier, vol. 116(C).
    3. Shahbaz, Muhammad & Destek, Mehmet Akif & Dong, Kangyin & Jiao, Zhilun, 2021. "Time-varying impact of financial development on carbon emissions in G-7 countries: Evidence from the long history," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    4. Yuang He & Xiaodan Gao & Yinhui Wang, 2022. "Sustainable Financial Development: Does It Matter for Greenhouse Gas Emissions?," Sustainability, MDPI, vol. 14(9), pages 1-23, April.
    5. Usman, Muhammad & Makhdum, Muhammad Sohail Amjad, 2021. "What abates ecological footprint in BRICS-T region? Exploring the influence of renewable energy, non-renewable energy, agriculture, forest area and financial development," Renewable Energy, Elsevier, vol. 179(C), pages 12-28.
    6. Muntasir Murshed & Uzma Khan & Aarif Mohammad Khan & Ilhan Ozturk, 2023. "Can energy productivity gains harness the carbon dioxide‐inhibiting agenda of the Next 11 countries? Implications for achieving sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 307-320, February.

    More about this item

    Keywords

    CO2 emission; Emerging economies; Climate change; EKC; RCH;
    All these keywords.

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