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Financial Institutional and Market Deepening, and Environmental Quality Nexus: A Case Study in G-11 Economies Using CS-ARDL

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  • Usman Mehmood

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Centre for Remote Sensing, University of the Punjab, Lahore 54590, Pakistan
    Department of Political Science, University of Management and Technology, Lahore 54590, Pakistan)

  • Salman Tariq

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Department of Space Science, University of the Punjab, Lahore 54590, Pakistan)

  • Zia ul Haq

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Department of Space Science, University of the Punjab, Lahore 54590, Pakistan)

  • Ephraim Bonah Agyekum

    (Department of Nuclear and Renewable Energy, Ural Federal University Named after the First President of Russia Boris Yeltsin, 19 Mira Street, Eka-Terinburg 620002, Russia)

  • Solomon Eghosa Uhunamure

    (Faculty of Applied Sciences, Cape Peninsula University of Technology, P.O. Box 652, Cape Town 8000, South Africa)

  • Karabo Shale

    (Faculty of Applied Sciences, Cape Peninsula University of Technology, P.O. Box 652, Cape Town 8000, South Africa)

  • Hasan Nawaz

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Centre for Remote Sensing, University of the Punjab, Lahore 54590, Pakistan)

  • Shafqat Ali

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Centre for Remote Sensing, University of the Punjab, Lahore 54590, Pakistan)

  • Ammar Hameed

    (Remote Sensing, GIS and Climatic Research Lab, National Center of GIS and Space Applications, Centre for Remote Sensing, University of the Punjab, Lahore 54590, Pakistan)

Abstract

This study presents a new insight into the dynamic relationship between financial institutional deepening (FID), financial deepening, financial market deepening (FMD), foreign direct investment (FDI), economic growth (GDP), population, and carbon dioxide emissions (CO 2 e) in the G-11 economies by employing a cross-sectionally augmented autoregressive distributed lag (CS-ARDL) approach during 1990–2019. The outcomes from the CS-ARDL and dynamic common correlated effects mean group (DCCEMG) models shows that financial deepening, GDP, FDI, and population degraded environmental quality both in the short run and the long run. Contrary to this, FID and FMD improves environmental quality in these countries. The government should work to maximize financial institutions (access, depth, efficiency) and financial markets (access, depth, efficiency) to reduce the CO 2 e. A strong positive and in-phase correlation of CO 2 e with economic growth and population is observed for G-11 countries. These results suggest policy makers should further improve financial institutions by creating opportunities for their populations. Moreover, the governments of G-11 countries should revise their foreign direct investment policies and attention should be given to import efficient means of energy production.

Suggested Citation

  • Usman Mehmood & Salman Tariq & Zia ul Haq & Ephraim Bonah Agyekum & Solomon Eghosa Uhunamure & Karabo Shale & Hasan Nawaz & Shafqat Ali & Ammar Hameed, 2022. "Financial Institutional and Market Deepening, and Environmental Quality Nexus: A Case Study in G-11 Economies Using CS-ARDL," IJERPH, MDPI, vol. 19(19), pages 1-19, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:11984-:d:921884
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    1. Xiaoyu Li & Jiawei Tang & Chao Feng & Yexiao Chen, 2023. "Can Government Environmental Auditing Help to Improve Environmental Quality? Evidence from China," IJERPH, MDPI, vol. 20(4), pages 1-21, February.

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