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Exploring the moderating effect of globalization, financial development and environmental degradation nexus: a roadmap to sustainable development

Author

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  • Tayyaba Rani

    (Xi’an Jiaotong University)

  • Muhammad Asif Amjad

    (University of Management and Technology)

  • Nabila Asghar

    (University of Education)

  • Hafeez Ur Rehman

    (University of Management and Technology)

Abstract

Financial development is a multidimensional process that contributes to economic growth but sometimes it has a devastating effect on climate change. No country can achieve sustainable development goals without caring the environmental quality. The present study investigates the moderating role of globalization (KOF) in determining the financial development (FD) on environmental degradation in the SAARC countries from 1990 to 2020. The long-run coefficients are estimated using the panel quantile regression (PQR) approach at lower, middle and upper quantile groups. The study shows the U-shaped relationship across three quantile groups based on financial development and carbon emissions. The moderator globalization (KOF) brings up the change in the turning point and flattens before the maturity of the U-shaped curve at the middle quantile while flattens after the maturity of the U-shaped curve at the upper quantile. The study recommends that by using energy-efficient technologies, better financial sector interaction with globalization enhances the environmental quality in SAARC countries.

Suggested Citation

  • Tayyaba Rani & Muhammad Asif Amjad & Nabila Asghar & Hafeez Ur Rehman, 2023. "Exploring the moderating effect of globalization, financial development and environmental degradation nexus: a roadmap to sustainable development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(12), pages 14499-14517, December.
    • Handle: RePEc:spr:endesu:v:25:y:2023:i:12:d:10.1007_s10668-022-02676-x
    DOI: 10.1007/s10668-022-02676-x
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    Cited by:

    1. Nayab Akhtar & Abdul Rashid, 2024. "Financial development and sustainable development: A review of literature," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(6), pages 7114-7139, December.

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    More about this item

    Keywords

    Financial development; Sustainable developments; Environmental degradation; Globalization;
    All these keywords.

    JEL classification:

    • B26 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Financial Economics
    • F6 - International Economics - - Economic Impacts of Globalization
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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