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Examining the asymmetric effects of Pakistan’s fiscal decentralization on economic growth and environmental quality

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Abstract

This study aims to investigate the asymmetric fiscal decentralization effect on economic growth and environmental quality by using Pakistan data from 1984 to 2018. Our findings demonstrate that expenditure decentralization has asymmetric effects on economic growth and CO2 emissions in short- and long-run in Pakistan. Therefore, positive and negative fluctuations in expenditure decentralization affect economic growth and CO2 emissions differently in Pakistan. The results of asymmetric ARDL suggested that negative shock of revenue decentralization is reduced the economic growth and CO2 emissions in the short and long-run, while positive shock of revenue decentralization is reduced the economic growth and CO2 emissions. Our asymmetric results are country-specific and more effective in policy analysis in Pakistan. The outcomes of this study may also help Pakistan’s local governments and the central government in addressing the problem of economic growth and environmental pollution.

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Data availability

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.

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Authors and Affiliations

  1. Beijing University of Posts and Telecommunications, Beijing, China

    Xiaolong Li & Muhammad Hafeez

  2. Quaid-i-Azam University, Islamabad, Pakistan

    Muhammad Zeeshan Younas & Sana Ullah

  3. Federal Urdu University, Islamabad, Pakistan

    Zubaria Andlib

  4. Pakistan Institute of Development Economics (PIDE), Islamabad, Pakistan

    Sidra Sohail

  5. Faculty of Management & Administrative Sciences, University of Sialkot, Sialkot, Pakistan

    Muhammad Hafeez

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  1. Xiaolong Li
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  2. Muhammad Zeeshan Younas
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  3. Zubaria Andlib
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  4. Sana Ullah
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  5. Sidra Sohail
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Sana Ullah, Zubaria Andlib, and Muhammad Zeeshan Younas analyzed the data and wrote the complete paper, while Xiaolong Li, Sidra Sohail, and Muhammad Hafeez read and approved the final version.

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Correspondence to Sana Ullah.

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Li, X., Younas, M.Z., Andlib, Z. et al. Examining the asymmetric effects of Pakistan’s fiscal decentralization on economic growth and environmental quality. Environ Sci Pollut Res 28, 5666–5681 (2021). https://doi.org/10.1007/s11356-020-10876-z

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