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Financial Market Development and Pollution Nexus in Saudi Arabia: Asymmetrical Analysis

Author

Listed:
  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam bin Abdulaziz University, P.O. Box 165, Al-Kharj 11942, Saudi Arabia)

  • Abdullatif Sulaiman Alrasheed

    (Department of Finance, College of Business Administration, Prince Sattam bin Abdulaziz University, P.O. Box 165, Al-Kharj 11942, Saudi Arabia)

  • Maham Furqan

    (S&P Global Marketing Intelligence, Islamabad 44000, Pakistan)

Abstract

The study is aimed to scrutinize the presence of Environmental Kuznets Curve (EKC) hypothesis in Saudi Arabia by analyzing a period of 1971–2014. Asymmetrical impacts of Financial Market Development (FMD) and energy consumption per capita have also been tested on CO 2 emissions per capita. The estimates buoyed the long and short-run relationships in the hypothesized model, and EKC is found to be true in terms of the relationship between income and pollution. Asymmetrical effects of FMD in the long run and asymmetrical effects of energy consumption per capita in the long and short run are presented on the CO 2 emissions per capita. A decreasing FMD is found responsible for environmental degradation, and decreasing energy consumption per capita is found helpful in controlling CO 2 emissions. The tested effect of the financial crisis is found insignificant on CO 2 emissions.

Suggested Citation

  • Haider Mahmood & Abdullatif Sulaiman Alrasheed & Maham Furqan, 2018. "Financial Market Development and Pollution Nexus in Saudi Arabia: Asymmetrical Analysis," Energies, MDPI, vol. 11(12), pages 1-15, December.
    • Handle: RePEc:gam:jeners:v:11:y:2018:i:12:p:3462-:d:189682
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