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Financial Development, Exports, and Industrial Pollution: Evidence from Lower and Upper Middle-Income Countries

Author

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  • Hafiz Muhammad Abubakar Siddique

    (Department of Business and Commerce, GIFT University, Gujranwala, Pakistan)

  • Areesha Aziz

    (Department of Business and Commerce, GIFT University, Gujranwala, Pakistan)

  • Naima Shehzadi

    (Department of Economics and Quantitative Methods, University of Management and Technology, Lahore, Pakistan)

  • Sumaira

    (Department of Business and Commerce, GIFT University, Gujranwala, Pakistan)

Abstract

This study aims to investigate the relationship between financial development (FD), exports, and industrial pollution by applying OLS, fixed effects (FE), random effects (RE), and GMM models for 36 upper-middle-income countries (UMICs) and 38 lower-middle-income countries (LMICs) from 1990 to 2019. The findings of the OLS indicate that financial development (FD), exports, and other factors including energy use, capital, and urban population significantly increase industrial pollution in UMICs and LMICs. The empirics of FE, RE, and GMM models also confirmed that exports, FD, and energy use have harmful effects on the environment. The study suggests that financial development should be directed toward projects and sources of energy that are favorable to the environment.

Suggested Citation

  • Hafiz Muhammad Abubakar Siddique & Areesha Aziz & Naima Shehzadi & Sumaira, 2022. "Financial Development, Exports, and Industrial Pollution: Evidence from Lower and Upper Middle-Income Countries," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 335-343, December.
    • Handle: RePEc:rfh:jprjor:v:8:y:2022:i:4:p:335-343
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    2. Ali, Amjad & Sumaira, Sumaira & Siddique, Hafiz Muhammad Abubakar & Ashiq, Saima, 2023. "Impact of Economic Growth, Energy Consumption and Urbanization on Carbon Dioxide Emissions in the Kingdom of Saudi Arabia," MPRA Paper 118832, University Library of Munich, Germany.

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