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Corporate Finance, Industrial Performance and Environment in Africa: Lessons for Policy

Author

Listed:
  • Ekundayo P. Mesagan

    (Pan Atlantic University, Lagos, Nigeria.)

  • Titilope C. Adewuyi

    (University of Lagos, Lagos, Nigeria.)

  • Olugbenga Olaoye

    (Bells University of Technology, Nigeria)

Abstract

This study employs the Pool Mean Group framework to investigate the impact of corporate finance and industrial performance on pollution in Africa between 1990 and 2020. The study, which focuses on 36 African nations, found that corporate financing insignificantly enhances environmental quality in the short run, while it significantly worsens the environment in the long run. Also, the result shows that industrial performance exerts a negative but insignificant impact on pollution in both the short- and long-run periods. Lastly, the interaction term between corporate finance and industrial performance has a negative and significant impact on pollution in both periods. With this striking result, the study recommends that efforts should be made to promote the growth of environmentally sound production plants in the continent through the removal of credit facilitation bottlenecks.

Suggested Citation

  • Ekundayo P. Mesagan & Titilope C. Adewuyi & Olugbenga Olaoye, 2022. "Corporate Finance, Industrial Performance and Environment in Africa: Lessons for Policy," Working Papers of the African Governance and Development Institute. 22/026, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:22/026
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    References listed on IDEAS

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    24. Yusuf, Ismaila Akanni & Mesagan, Ekundayo Peter & Amadi, Agatha Nkem, 2020. "Effect of financial deepening on stock market returns: The case of military and democratic post-SAP regimes in Nigeria," BizEcons Quarterly, Strides Educational Foundation, vol. 6, pages 3-21.
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    Cited by:

    1. Lingling Zhou & Wenqi Li & Brian Sheng-Xian Teo & Siti Khalidah Md Yusoff, 2023. "The Impact of Green M&A Listed Companies’ Size on the Rural Ecological Environment—Digitalization as Moderating Effect," Sustainability, MDPI, vol. 15(7), pages 1-20, March.
    2. Mesagan, Ekundayo Peter & Alimi, Olorunfemi Yasiru & Vo, Xuan Vinh, 2022. "The asymmetric effects of exchange rate on trade balance and output growth," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    3. Deng, Youyi & Dong, Kangyin & Taghizadeh-Hesary, Farhad & Xue, Jinjun, 2023. "How does environmental regulation affect the double dividend for energy firms? Evidence from China’s EPT policy," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 807-820.
    4. Mesagan, Ekundayo Peter & Vo, Xuan Vinh, 2023. "Does natural resource rent and consumption interplay worsen Africa's pollution? Heterogeneous panel approach with cross-sectional dependence," Resources Policy, Elsevier, vol. 82(C).
    5. Ekundayo Peter Mesagan & Xuan Vinh Vo & Precious Muhammed Emmanuel, 2023. "The technological role in the growth-enhancing financial development: evidence from African nations," Economic Change and Restructuring, Springer, vol. 56(1), pages 657-680, February.
    6. Olugbenga Olaoye & Risikat O.S Dauda, 2022. "Energy Use, Financial Development and Pollution in Selected African Countries," Journal of Economic Impact, Science Impact Publishers, vol. 4(3), pages 188-195.
    7. Mesagan, Ekundayo Peter & Charles, Ayobola Olufolake & Vo, Xuan Vinh, 2023. "The relevance of resource wealth in output growth and industrial development in Africa," Resources Policy, Elsevier, vol. 82(C).

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    More about this item

    Keywords

    Corporate Finance; Industrial Performance; Pollution; Africa;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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