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Does Energy-Growth and Environment Quality Matter for Agriculture Sector in Pakistan or not? An Application of Cointegration Approach

Author

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  • Abbas Ali Chandio

    (College of Economics, Sichuan Agricultural University, Chengdu 611130, China)

  • Yuansheng Jiang

    (College of Economics, Sichuan Agricultural University, Chengdu 611130, China)

  • Abdul Rauf

    (School of Economics and Management, Southeast University, Nanjing 211189, Jiangsu, China)

  • Amir Ali Mirani

    (College of Management, Sichuan Agricultural University, Chengdu 611130, Sichuan, China)

  • Rashid Usman Shar

    (College of Management, Sichuan Agricultural University, Chengdu 611130, Sichuan, China)

  • Fayyaz Ahmad

    (School of Economics, Lanzhou University, Lanzhou 730000, Gansu, China)

  • Khurram Shehzad

    (School of Economics and Management, Southeast University, Nanjing 211189, Jiangsu, China)

Abstract

The main objective of this paper is to examine the long-term effects of financial development, economic growth, energy consumption (electricity consumption in the agriculture sector), foreign direct investment (FDI), and population on the environmental quality in Pakistan during the period of 1980 to 2016. We use CO 2 emissions from the agriculture sector as a proxy indicator for environmental quality. We employ various unit root tests (e.g., ADF, PP, ERS, KPSS) and structural break unit root tests (Z&A, CMR) to check the stationarity and structural break in the data series. Cointegration tests, i.e., Johansen, Engle-Granger, and ARDL cointegration approaches are used to ensure their robustness. Results showed that significant long-term cointegration exists among the variables. Findings also indicated that an increase in financial development and foreign direct investment (FDI) improves environmental quality, whereas the increase in economic growth and electricity consumption in the agriculture sector degrades environmental quality in Pakistan. Based on the findings, we suggest policymakers should provide a conducive environment for foreign investment. Moreover, it is also suggested that a reliance on fossil fuels be reduced and a transition to renewable energy sources be encouraged to decrease the environmental pollution in the country.

Suggested Citation

  • Abbas Ali Chandio & Yuansheng Jiang & Abdul Rauf & Amir Ali Mirani & Rashid Usman Shar & Fayyaz Ahmad & Khurram Shehzad, 2019. "Does Energy-Growth and Environment Quality Matter for Agriculture Sector in Pakistan or not? An Application of Cointegration Approach," Energies, MDPI, vol. 12(10), pages 1-17, May.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:10:p:1879-:d:231922
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    2. Abbas Ali Chandio & Abdul Rauf & Yuansheng Jiang & Ilhan Ozturk & Fayyaz Ahmad, 2019. "Cointegration and Causality Analysis of Dynamic Linkage between Industrial Energy Consumption and Economic Growth in Pakistan," Sustainability, MDPI, vol. 11(17), pages 1-18, August.
    3. Khurram Shehzad & Umer Zaman & Mahmood Ahmad & Xiaoxing Liu, 2022. "Asymmetric impact of information and communication technologies on environmental quality: analyzing the role of financial development and energy consumption," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 1761-1780, February.
    4. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Maleeha Mohammed Zaaf Al-Qahtani & Zafrul Allam & Nawaz Ahmad & Maham Furqan, 2019. "Agriculture development and CO2 emissions nexus in Saudi Arabia," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    5. Xinpeng Xing & Jianhua Wang & Tiansen Liu & He Liu & Yue Zhu, 2019. "How Energy Consumption and Pollutant Emissions Affect the Disparity of Public Health in Countries with High Fossil Energy Consumption," IJERPH, MDPI, vol. 16(23), pages 1-18, November.
    6. Amogh Ghimire & Feiting Lin & Peifen Zhuang, 2021. "The Impacts of Agricultural Trade on Economic Growth and Environmental Pollution: Evidence from Bangladesh Using ARDL in the Presence of Structural Breaks," Sustainability, MDPI, vol. 13(15), pages 1-15, July.
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    8. Mansi Wang & Noman Arshed & Mubbasher Munir & Samma Faiz Rasool & Weiwen Lin, 2021. "Investigation of the STIRPAT model of environmental quality: a case of nonlinear quantile panel data analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(8), pages 12217-12232, August.
    9. Shahriyar Mukhtarov & Sugra Humbatova & Natig Gadim-Oglu Hajiyev & Sannur Aliyev, 2020. "The Financial Development-Renewable Energy Consumption Nexus in the Case of Azerbaijan," Energies, MDPI, vol. 13(23), pages 1-14, November.
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