Abstract
This paper examines the impact of economic growth, energy consumption, financial development, and industrialization on environmental degradation in 8 selected ASEAN + 3 countries covering the period 1994–2018. The autoregressive distributed lag model pooled mean group was applied to estimate the long run and short relationship. The fully modified ordinary least squares, dynamic least squares, and seemingly unrelated regression were applied to check the robustness of pooled mean group. Furthermore, panel Dumitrescu and Hurlin causality test was utilized to explore the causal relationships among the variables. The results of cointegration tests confirm the presence of the long run cointegration relationship. The empirical findings, in the long run, demonstrate that the elasticity of economic growth is negatively interrelated to environmental degradation. The elasticities of energy consumption and financial development showed a positive relationship with environmental degradation. The elasticity of industrialization has a negative connection with environmental degradation. The robustness results show some conflict with the autoregressive distributed lag model pooled mean group results. Dumitrescu Hurlin panel causality demonstrates a bidirectional causality between economic growth and environmental degradation, energy consumption and environmental degradation, and economic growth and energy consumption. These results confirm that energy consumption and financial development harm environmental quality in selected countries through exudating more CO2 emissions in space, while economic growth and industrialization reduce environmental degradation by mitigating exudate CO2 emissions.
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Data availability
The data for this study is available on the British Petroleum (BP) and World Bank Indicators (WDI) database. The data used in this study is from 1994 to 2018.
Abbreviations
- OECD:
-
Organization for Economic Co-operation and Development
- ARDL:
-
Autoregressive distributed lag model
- PMG/ARDL:
-
Pooled mean group autoregressive distributed lag model
- FMOLS:
-
Fully modified ordinary least squares
- DOLS:
-
Dynamic ordinary least squares
- SUR:
-
Seemingly unrelated regression
- NIPALS:
-
Nonlinear iterative partial least square regression
- PMG:
-
Pooled mean group
- GMM:
-
Generalized method of moments
- CCEMG:
-
Common correlated effects mean group
- BP:
-
British Petroleum
- WBI:
-
World Bank Indicators
- CD:
-
Cross-sectional dependence
- CADF:
-
Cross-sectionally augmented Dickey-Fuller
- CIPS:
-
Cross-sectionally augmented Im, Pesaran, and Shin
- SIC:
-
Schwarz information
- CS-ARDL:
-
Cross-sectionally augmented auto-regressive distributive lag model
- BRICS:
-
Brazil, Russia, India, People’s Republic of China, and South Africa
- CO2:
-
Carbon dioxide emissions
- GDP:
-
Gross domestic product
- EC:
-
Energy consumption
- DC:
-
Financial development
- IND:
-
Industrialization
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The idea of the original draft belongs to Khalid Eltayeb Elfaki, as well as he writes the introduction, literature review, and empirical outcomes sections. Zeeshan Khan and Dervis Kirikkaleli helped in data collection and data compiling. Naveed Khan visualized data of observed variables. All the authors read and approved the final manuscript.
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Elfaki, K.E., Khan, Z., Kirikkaleli, D. et al. On the nexus between industrialization and carbon emissions: evidence from ASEAN + 3 economies. Environ Sci Pollut Res 29, 31476–31485 (2022). https://doi.org/10.1007/s11356-022-18560-0
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DOI: https://doi.org/10.1007/s11356-022-18560-0