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Empirical Study on CO 2 Emissions, Financial Development and Economic Growth of the BRICS Countries

Author

Listed:
  • Fangjhy Li

    (Department of Investment, School of Business, Wuchang University of Technology, No. 16, Jiangxia Avenue, Jiangxia District, Wuhan 430223, China)

  • Yang-Che Wu

    (Department of Finance, College of Finance, Feng Chia University, No. 100 Wenhwa Rd., Xitun, Taichung 40724, Taiwan)

  • Mei-Chih Wang

    (Chinese Social and Management Studies, Tunghai University, No.1727, Sec.4, Taiwan Boulevard, Xitun, Taichung 407224, Taiwan)

  • Wing-Keung Wong

    (Department of Finance, Fintech & Blockchain Research Center, Big Data Research Center, Asia University, 500, Lioufeng Rd., Wufeng, Taichung 41354, Taiwan
    Department of Medical Research, China Medical University Hospital, Taichung 40402, Taiwan
    Department of Economics and Finance, The Hang Seng University of Hong Kong, Hong Kong 999077, China)

  • Zhijie Xing

    (Department of Finance, School of Finance, Hubei University of Economics, No. 8 Yangqiaohu Road, Jiangxia District, Wuhan 430205, China)

Abstract

This paper empirically examined relevant data on BRICS CO 2 emissions, financial development, and economic growth in the past 40 years, and analyzed the correlation between them. Using the cointegration test, it found that there is a clear correlation between the variables in China and South Africa, which show that there is a two-way relationship between CO 2 emissions, financial development, and economic growth in both countries. Using the quantile regression method in the analysis, the results demonstrated that at the 0.6th quartile, South Africa’s financial development had a negative impact on CO 2 emissions, while Brazil’s CO 2 emissions had a negative impact on financial development. Economic growth was subsequently added as a control variable, and the quantile-on-quantile regression method was used to test the correlation between the financial development of the BRICS countries and their CO 2 emissions. Finally, based on empirical conclusions, this paper proposed that BRICS countries should focus on sustainable economic development; when government departments formulate emission-reduction policies, they must reasonably consider the relationship between financial development and emission-reduction policies.

Suggested Citation

  • Fangjhy Li & Yang-Che Wu & Mei-Chih Wang & Wing-Keung Wong & Zhijie Xing, 2021. "Empirical Study on CO 2 Emissions, Financial Development and Economic Growth of the BRICS Countries," Energies, MDPI, vol. 14(21), pages 1-33, November.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:21:p:7341-:d:672267
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