Governance, financial development, and environmental degradation: evidence from symmetric and asymmetric ARDL


Shehzad K., Zaman U., Ahmad M., KOÇAK E.

Environment, Development and Sustainability, 2022 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Publication Date: 2022
  • Doi Number: 10.1007/s10668-022-02682-z
  • Journal Name: Environment, Development and Sustainability
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Scopus, International Bibliography of Social Sciences, PASCAL, ABI/INFORM, Aquatic Science & Fisheries Abstracts (ASFA), BIOSIS, Business Source Elite, Business Source Premier, CAB Abstracts, Geobase, Greenfile, Index Islamicus, Pollution Abstracts, Veterinary Science Database, Civil Engineering Abstracts
  • Keywords: Governance, Financial development, CO2 emissions, EKC, Symmetric and asymmetric ARDL, Pakistan, CARBON-DIOXIDE EMISSIONS, RENEWABLE ENERGY-CONSUMPTION, CO2 EMISSIONS, ECONOMIC-GROWTH, EKC HYPOTHESIS, TIME-SERIES, ECOLOGICAL FOOTPRINT, EMPIRICAL-EVIDENCE, KUZNETS CURVE, IMPACT
  • Kayseri University Affiliated: No

Abstract

© 2022, The Author(s), under exclusive licence to Springer Nature B.V.The relationship between economic growth and environmental degradation has been exhaustively explored from a theoretical and empirical perspective. However, most of the studies explore symmetric relationships, and none of these studies explicitly address the role of governance and financial development. Hence, this study uses both symmetric and asymmetric methods to investigate the linkage between governance, financial development, economic growth, and CO2 emissions in Pakistan over 1990–2018. The empirical findings show that governance supports environmental sustainability by reducing CO2 emissions. Moreover, adverse shocks in governance increase CO2 emissions. However, the findings of linear and nonlinear ARDL revealed that financial development increases environmental degradation by exacerbating CO2 emissions. Moreover, the results validated the Environment Kuznets Curve in Pakistan as more income reduces emissions. Our empirical results have several policy implications for environmental sustainability and sustainable development.