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Exploring the role of fossil fuels, hydroelectricity consumption, and financial sector in ensuring sustainable economic development in the emerging economy

Environmental Science and Pollution Research volume 28, pages 5953–5965 (2021)Cite this article

Abstract

This study is conducted to address the research question of whether hydroelectricity and fossil fuels contribute to sustainable economic development in an emerging economy in this era of globalization? Further, this study applies the novel approach of Harvey unit root test which is a linearity test to predict the possible existence of non-linearity. The results confirmed that the majority of the series in this study are linear. Furthermore, the two break test is applied to investigate the integration sequence of the series. The bounds test approach confirms the existence of a long-run association among the variables. Additionally, the long-run relationship is analysed within the framework of the ARDL approach. Financial development, fossil fuel, and capital positively contribute to economic development, while the effect of hydroelectricity is insignificant. Moreover, globalization effects GDP negatively. The symmetric causality suggests a uni-directional causal movement from hydroelectricity consumption and globalization towards GDP. The outcome of the study emphasizes the importance of renewable sources such as hydropower energy for ensuring sustainable development in the presence of globalization.

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Notes

  1. https://www.renewableenergyworld.com/articles/print/volume-17/issue-6/hydropower/powering-up-turkey-with-hydropower.html

  2. https://www.energyfunding.ca/hydropower?gclid=

  3. https://www.carbonbrief.org/carbon-brief-profile-turkey

  4. https://www.joi.or.jp/modules/investment/custom/documents/TUR_20101105Memorandum_HPP_WBS_region.pdf

  5. http://www.hurriyetdailynews.com/regulator-gives-permission-for-new-bank-143809

  6. http://www.hurriyetdailynews.com/european-bank-provides-new-funds-for-turkish-renewable-energy-projects-via-akbank-101180

  7. Please refer to Dreher (2006) for further information and definitions about globalization index, financial globalization, and economic globalization

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Affiliations

  1. Institute of Business Studies and Leadership, Faculty of Business and Economics, Abdul Wali Khan University, Mardan, Pakistan

    Faisal Faisal & Muhammad Numan Khan

  2. Department of Zoology, Faculty of Life and Chemical Sciences, Abdul Wali Khan University, Mardan, Pakistan

    Ruqiya Pervaiz

  3. Bekhal Bank, Erbil, Iraq

    Peshraw Majid Muhamad

  4. Department of Banking and Finance, Near East University, Mersin 10, 99138, Nicosia, North Cyprus, Turkey

    Mohammad Othman Jamil Rashdan

Authors
  1. Faisal Faisal
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  2. Muhammad Numan Khan
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  3. Ruqiya Pervaiz
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  4. Peshraw Majid Muhamad
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  5. Mohammad Othman Jamil Rashdan
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Correspondence to Faisal Faisal.

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Faisal, F., Khan, M.N., Pervaiz, R. et al. Exploring the role of fossil fuels, hydroelectricity consumption, and financial sector in ensuring sustainable economic development in the emerging economy. Environ Sci Pollut Res 28, 5953–5965 (2021). https://doi.org/10.1007/s11356-020-10608-3

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  • DOI: https://doi.org/10.1007/s11356-020-10608-3

Keywords

  • Fossil fuels
  • Hydroelectricity
  • Globalization
  • Harvey unit root test
  • Financial globalization