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Economic integration and environmental quality: accounting for the roles of financial development, industrialization, urbanization and renewable energy

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  • Samuel Adams
  • Hervé Kaffo Fotio

Abstract

This study investigates the effect of economic integration on the environment in a sample of 36 African countries from 1990 to 2018. We employ the fixed-effect D&K estimator and the mediation analysis to examine direct and indirect effects, respectively. The findings reveal that economic integration improves the environment only when its negative indirect effects are neutralized. Precisely, economic integration has a direct negative effect on carbon dioxide (CO2) emissions and an indirect positive effect through urbanization, renewable energy consumption, financial development, and industrialization. The net effect is positive, and therefore, economic integration undermines the environmental quality in Africa. This result is robust when economic integration is split into trade and financial integration. The main implication of this study is that integration policies in Africa should also target greening the financial sector, sustainable urban planning, energy efficiency in the industrial sector, and renewable energy use.

Suggested Citation

  • Samuel Adams & Hervé Kaffo Fotio, 2024. "Economic integration and environmental quality: accounting for the roles of financial development, industrialization, urbanization and renewable energy," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 67(3), pages 688-713, February.
    • Handle: RePEc:taf:jenpmg:v:67:y:2024:i:3:p:688-713
    DOI: 10.1080/09640568.2022.2131510
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    Citations

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    Cited by:

    1. Adel Ben Youssef & Mounir Dahmani, 2024. "Evaluating Environmental Sustainability in Africa: The Role of Environmental Taxes, Productive Capacities, and Urbanization Dynamics," Economies, MDPI, vol. 12(4), pages 1-24, March.
    2. Liu, Yishuang & Huang, Jinpeng & Xu, Jianxiang & Xiong, Shufei, 2024. "Natural resource dependence and sustainable development policy: Insights from city-level analysis," Resources Policy, Elsevier, vol. 91(C).
    3. Huang, Shuai & Tan, Huizhu, 2025. "Evaluating the effects of green supply chain, digital technologies, and energy prices on renewable energy innovations: A way forward for an emerging economy," Energy Economics, Elsevier, vol. 141(C).
    4. Salman, Muhammad & Wang, Guimei, 2024. "Rural energy poverty alleviation in OECD nations: An integrated analysis of renewable energy, green taxation, and the United Nations agenda 2030," Renewable Energy, Elsevier, vol. 237(PD).
    5. Kaffo Fotio, Hervé & Timbi, Sezard & Mbiankeu Nguéa, Stéphane, 2024. "Breaking barriers, building resilience: Leveraging knowledge to mitigate energy vulnerability in Africa," Energy Policy, Elsevier, vol. 194(C).
    6. Abdelmohsen A. Nassani & Muhammad Imran & Shiraz Khan & Khalid Zaman & Haroon ur Rashid Khan & Mohamed Haffar, 2025. "Financial integration and economic growth: impact of renewable energy investments, technology transfer, and climate change on Europe and central Asian economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 11(1), pages 1-24, December.
    7. Chen, Qian, 2025. "Energy policy uncertainty, financial development and public-private investment in BRIC nations," Finance Research Letters, Elsevier, vol. 71(C).

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