Exploring the existence of environmental Kuznets curve in the midst of financial development, openness, and foreign dire
- PDF / 931,578 Bytes
- 17 Pages / 595.276 x 790.866 pts Page_size
- 39 Downloads / 218 Views
RESEARCH ARTICLE
Exploring the existence of environmental Kuznets curve in the midst of financial development, openness, and foreign direct investment in New Zealand: insights from ARDL bound test Muhammed Ashiq Villanthenkodath 1 & Muhamed Faizudheen Arakkal 2 Received: 1 May 2020 / Accepted: 8 June 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract The present research paper tries to explore the existence of the environmental Kuznets curve in New Zealand by taking annual time series data from 1970 to 2017. The study also considers other variables like trade openness, financial development, and foreign direct investment. Depending on the nature of the selected variables, the study has utilized the autoregressive distributed lag(ARDL) model to explore the cointegration among the variables. The result verifies the existence of the long-run cointegration among the variables. Further, it confirms the presence of the environmental Kuznets curve. The estimated result also shows that trade openness, financial development, and foreign direct investment improves the environmental quality. Moreover, to verify the environmental Kuznets curve visually, we have plotted the CO2 emissions and economic growth, and the scatter plot exhibits an inverted U–shaped relationship between CO2 emissions and economic growth. The turnaround point of the plot with a single break is in 1987. These findings give a wide range of policies for economic growth and environmental quality in New Zealand. Keywords EKC . Environmental degradation . Growth . ARDL . FDI . Trade openness
Introduction There is a general agreement among the international organizations and countries regarding the pivotal role of environmental quality for the better economic health of every country. From this understanding, the different international organizations come with the idea of green growth and sustainable development. According to the OECD (2011), green growth is “Fostering economic growth and development, while ensuring that natural assets continue to provide the resources and environmental services on which our well-being relies.” The
Responsible Editor: Nicholas Apergis * Muhammed Ashiq Villanthenkodath [email protected] Muhamed Faizudheen Arakkal [email protected] 1
Department of Humanities and Social Sciences, IIT Kharagpur, Kharagpur 721302, India
2
Department of Economics, Faculty of Social Science, Aligarh Muslim University, Aligarh, Uttar Pradesh 202002, India
World Bank (2012) defined the need of green growth “as growth that is efficient in its use of natural resources, clean in that it minimizes pollution and environmental impacts, and resilient in that it accounts for natural hazards and the role of environmental management and natural capital in preventing physical disasters. And this growth needs to be inclusive.” Therefore, the role of environmental and economic growth is highly necessary for the bright future of any nation. In that sense, there has been a debate on this ground among the policymakers and en
Data Loading...
