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Climate Change Adaptation Strategy and Inclusive Development in Africa: Analyzing the Threshold Effect of Banking Services and Environmental Taxes

In: Climate Change in Africa

Author

Listed:
  • Mohammed Amidu

    (University of Ghana Business School)

  • Edward Asiedu

    (University of Ghana Business School)

  • Osman Babamu Halidu

    (Kumasi Technical University)

  • Alex Dontoh

    (New York University, Leonard N. Stern School of Business)

Abstract

This study examines whether the inclusive development effect of climate change adaptation is contingent on the level of environmental taxes and banking services prevalent in Africa. The study adopts the more refined and more appropriate dynamic threshold panel: nonlinear asymmetric dynamics and cross-sectional heterogeneity simultaneously in a dynamic threshold panel data framework. The results show that firstly, the impact of climate change adaptation on inclusive development is positive and statistically significant only above a certain threshold level of environmental taxes. Below that threshold, the effect is rather negative. Secondly, there is also a threshold effect of banking services, thus the climate change adaptation effect on inclusive development is positive under both below and above the threshold but only significantly above the threshold. The findings suggest that the climate change adaptation-inclusive development nexus is contingent on the level of environmental taxes and banking services. In spite of our study being seminal in simultaneously examining the roles of environmental taxes and banking services, it contrasts prior research utilizing the linear interaction model with predetermined conditional constraints.

Suggested Citation

  • Mohammed Amidu & Edward Asiedu & Osman Babamu Halidu & Alex Dontoh, 2026. "Climate Change Adaptation Strategy and Inclusive Development in Africa: Analyzing the Threshold Effect of Banking Services and Environmental Taxes," Advances in African Economic, Social and Political Development, in: Mohammed Amidu & Albert Ahenkan & Edward Asiedu (ed.), Climate Change in Africa, pages 287-330, Springer.
    • Handle: RePEc:spr:aaechp:978-3-032-15259-6_11
    DOI: 10.1007/978-3-032-15259-6_11
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