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The environmental sustainability effects of financial development and urbanization in Latin American countries

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Abstract

The present study assesses the impact of urbanization, economic growth, energy consumption, and financial development on CO2 emissions in Latin American countries using a dataset spanning between 1980 and 2017. The current paper employs utilized panel econometric techniques such as CIDF, panel unit test, the Westerlund panel cointegration, fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and Dumitrescu Hurlin panel causality test to assess these associations. The outcomes from the FMOLS and DOLS estimation reveal that (i) economic growth impacts CO2 emissions positively, (ii) energy consumption exerts a positive impact on CO2 emissions, and (iii) urbanization impacts CO2 emissions positively. Furthermore, the outcomes of the causality test reveal that energy consumption and economic growth can predict CO2 emissions in Latin countries. The findings highlight the importance of policymakers actively coordinating strategies to address Latin America’s severe environmental degradation.

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Availability of data and materials

Data is readily available at https://data.worldbank.org.

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Authors and Affiliations

  1. Faculty of Economics and Administrative Science, Department of Business Administration, Cyprus International University, Nicosia, Northern Cyprus, Mersin 10, Turkey

    Tomiwa Sunday Adebayo

  2. Faculty of International Economics and Trade, Shandong University of Finance and Economics, Jinan, 250014, Shandong, China

    Muhammad Ramzan & Hafiz Arslan Iqbal

  3. Faculty of Economics and Administrative Science, Department of Economics, Near East University, North Cyprus, Mersin 10, Turkey

    Abraham Ayobamiji Awosusi

  4. Faculty of Economics and Administrative Sciences, Department of Business Management, Girne American University, North Cyprus, Mersin 10, Turkey

    Gbenga Daniel Akinsola

Authors
  1. Tomiwa Sunday Adebayo
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  2. Muhammad Ramzan
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  3. Hafiz Arslan Iqbal
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  4. Abraham Ayobamiji Awosusi
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  5. Gbenga Daniel Akinsola
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Contributions

Abraham Ayobamiji Awosusi and Tomiwa Sunday Adebayo designed the experiment and collect the dataset. The introduction and literature review sections are written by Tomiwa Sunday Adebayo, Gbenga Daniel Akinsola, and Abraham Ayobamiji Awosusi. Hafiz Arslan Iqbal, Muhammad Ramzan, and Abraham Ayobamiji Awosusi constructed the methodology section and empirical outcomes in the study. Tomiwa Sunday Adebayo, Muhammad Ramzan, and Gbenga Daniel Akinsola contributed to the interpretation of the outcomes. All the authors read and approved the final manuscript.

Corresponding author

Correspondence to Tomiwa Sunday Adebayo.

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The authors declare no competing interests.

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Adebayo, T.S., Ramzan, M., Iqbal, H.A. et al. The environmental sustainability effects of financial development and urbanization in Latin American countries. Environ Sci Pollut Res 28, 57983–57996 (2021). https://doi.org/10.1007/s11356-021-14580-4

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  • DOI: https://doi.org/10.1007/s11356-021-14580-4

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