Examining the direct and indirect effects of financial development on CO2 emissions for 88 developing countries

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dc.authoridKhan, Muhammad/0000-0001-9618-7276
dc.contributor.authorKhan, Muhammad
dc.contributor.authorOzturk, Ilhan
dc.date.accessioned2025-03-07T20:19:26Z
dc.date.available2025-03-07T20:19:26Z
dc.date.issued2021
dc.departmentÇağ Üniversitesi
dc.description.abstractThe previous literature presents conflicting outcomes on the relationship between financial development and CO2 emissions. This study fixes this puzzle by testing both the direct and indirect effects of financial development on environmental pollution using Environmental Kuznets Curve (EKC) framework. Our empirical investigation relies upon difference and system generalized method of moments for a large sample of 88 developing countries during 2000-2014 period. The estimated outcomes, based on five different indicators of financial development, support the pollution inhibiting role of financial development for the selected countries. We also validate the existence of EKC hypothesis for the panel of economies. More importantly, the results of the indirect channels show that financial development also reduces the adverse effects of income, trade openness and FDI on the pollution emissions. Further, the validity of pollution heaven hypothesis (PHH), tested through trade openness and FDI variables, is also contingent upon the existence of weak financial structure. When financial development traverses certain limits, PHH ceases to exist for both these variables. Lastly, population size augments pollution emissions while human capital reduces the later. Based on these results, we propose some very important policy implications for the sample economies.
dc.identifier.doi10.1016/j.jenvman.2021.112812
dc.identifier.issn0301-4797
dc.identifier.issn1095-8630
dc.identifier.pmid34058453
dc.identifier.scopus2-s2.0-85107877174
dc.identifier.scopusqualityQ1
dc.identifier.urihttps://doi.org/10.1016/j.jenvman.2021.112812
dc.identifier.urihttps://hdl.handle.net/20.500.12507/3173
dc.identifier.volume293
dc.identifier.wosWOS:000677857000004
dc.identifier.wosqualityQ1
dc.indekslendigikaynakWeb of Science
dc.indekslendigikaynakScopus
dc.indekslendigikaynakPubMed
dc.language.isoen
dc.publisherAcademic Press Ltd- Elsevier Science Ltd
dc.relation.ispartofJournal of Environmental Management
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_WoS_20241226
dc.subjectFinancial development
dc.subjectEconomic development
dc.subjectInteraction effects
dc.titleExamining the direct and indirect effects of financial development on CO2 emissions for 88 developing countries
dc.typeArticle

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