Does Globalization Impede Environmental Quality in Bangladesh? The Role of Real Economic Activities and Energy Use

This research investigates the relationship between globalization, environment degradation, industrial production, energy consumption and economic growth over the period of 1972-2015 for Bangladesh. The long run relationship between variables is examined using ARDL bound test and combined cointegration approach. These cointegration approaches predict the long run relationship between underlying variables. The empirical findings demonstrate that globalization, industrial production and energy consumption drives environmental degradation positively, but economic growth pushes environmental degradation negatively in the long run as well as short run. Further, the direction of causality is examined by VECM Granger causality which shows bidirectional causality between energy consumption and environment degradation, economic growth and environment degradation, industrial production and economic growth, and energy consumption and economic growth for both short-long run. Our results suggest a unidirectional causality runs from environmental degradation and energy consumption to industrial production. The empirics of Innovative Accounting Approach (IAA) confirm the findings of VECM Granger causality. Our findings suggest that Policymakers may focus on imports of advance technology and export led growth strategy to control environmental pollution.