The effect of income inequality and energy consumption on environmental degradation: the role of institutions and financial development in 180 countries of the world

In this study, we analyze the determinants of environmental quality in Nigeria, focusing on the role of financial development. It is a time series analysis covering the period from 1981 to 2016. The study uses the ARDL bounds testing approach to analyze data on urbanization, per capita income, environmental degradation, energy consumption, trade intensity, and capital investment. We generate the environmental degradation index using principal component analysis (PCA). Empirical results suggest that income, financial development, energy consumption, and trade are significant in explaining environmental quality, whereas investment and urbanization are insignificant in the model. Moreover, we find no causality between the capital investment, financial development, and environmental quality, although urbanization and income unidirectionally cause environmental degradation. Also, there exists a bidirectional causality between energy consumption and environmental degradation. Therefore, to ensure efficient credit allocation to low carbon emitting firms, financial sector operators should adequately screen investment proposals before committing funds to them.

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Do macroeconomic uncertainty and financial development cause environmental degradation? Evidence from an emerging economy

International Journal of Social Economics ◽

10.1108/ijse-10-2020-0690 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Bijoy Rakshit ◽

Yadawananda Neog

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Financial Development ◽

Environmental Degradation ◽

Environmental Quality ◽

Content Type ◽

Inflation Volatility ◽

Macroeconomic Uncertainty ◽

Consumption Intensity

PurposeThe main purpose of this paper is to empirically investigate the effect of macroeconomic uncertainty on environmental degradation in India over the period 1971–2016. Additionally, this paper considers the role of financial development, energy consumption intensity and economic growth in explaining the variation of environmental degradation in India.Design/methodology/approachThe authors applied the power generalized autoregressive conditional heteroskedasticity model to measure inflation volatility and used it as a proxy for macroeconomic uncertainty. From a methodological perspective, the authors employ the autoregressive distributive lag bound testing model to establish the long-run equilibrium association between the variables. The Toda–Yamamoto causality approach has been used to examine the direction of causality between the variables.FindingsFindings suggest that macroeconomic uncertainty exerts a positive effect on carbon emissions, indicating that higher inflation volatility, as a proxy for macroeconomic uncertainty, hinders India's environmental quality. Financial development, economic growth and energy consumption intensity have also adversely impacted environmental quality.Practical implicationsThe negative association between macroeconomic uncertainty and environmental degradation calls for some stringent policy actions. While formulating policies to promote growth and maintain stability, policymakers and government stakeholders should take into account the environmental effects of macroeconomic policies. There is a need to implement more environmental-friendly technologies in the financial sector that could reduce carbon emission.Originality/valueTo the best of the authors' knowledge, this study is the first that considers the role of macroeconomic uncertainty along with financial development and energy intensity in an emerging economy like India.

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Wage Inequality on the Rise: The Role of Workers' Characteristics

Journal of Income Distribution ◽

10.25071/1874-6322.40320 ◽

2016 ◽

pp. 99-123

Author(s):

Guillermo Alves ◽

Matías Brum ◽

Mijail Yapor

Keyword(s):

Human Capital ◽

Public Sector ◽

Income Inequality ◽

Wage Inequality ◽

Increasing Returns ◽

Developing Economy ◽

Public Sector Employment ◽

The World

In recent decades, wage inequality has been an important factor behind the rise in income inequality around the world. The leading explanation for increased wage inequality has been the increasing returns to human capital, usually attributed to changing technology and globalization. This article studies the rise in wage inequality in Uruguay, a small open developing economy. In contrast with popular explanations, our results highlight a strong and gradual inequalizing effect of changes in workers’ characteristics, such as increased schooling and age, decline of public sector employment and contraction of employment in manufacturing together with increased employment in services.

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Energy consumption, environmental degradation, economic growth and financial development in globe: Dynamic simultaneous equations panel analysis

Energy Reports ◽

10.1016/j.egyr.2019.08.004 ◽

2019 ◽

Vol 5 ◽

pp. 1089-1102 ◽

Cited By ~ 14

Author(s):

Sher Khan ◽

Zhuangzhuang Peng ◽

Yongdong Li

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Financial Development ◽

Environmental Degradation ◽

Simultaneous Equations ◽

Panel Analysis

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The impact of financial development, economic growth and energy consumption on environmental degradation

Management of Environmental Quality An International Journal ◽

10.1108/meq-05-2014-0063 ◽

2015 ◽

Vol 26 (5) ◽

pp. 666-682 ◽

Cited By ~ 35

Author(s):

Madhu Sehrawat ◽

A K Giri ◽

Geetilaxmi Mohapatra

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Financial Development ◽

Environmental Degradation ◽

Series Data ◽

Development Economic ◽

Content Type ◽

Indian Economy ◽

Long Run ◽

The Impact

Purpose – The purpose of this paper is to investigate the impact of financial development, economic growth and energy consumption on environment degradation for Indian economy by using the time series data for the period 1971-2011. Design/methodology/approach – The stationary properties of the variables are checked by ADF, DF-GLS, PP and Ng-Perron unit root tests. The long-run relationship is examined by implementing the Autoregressive Distributed Lag bounds testing approach to co-integration and error correction method (ECM) is applied to examine the short-run dynamics. The direction of the causality is checked by VECM framework and variance decomposition is used to predict exogenous shocks of the variables. Findings – The empirical evidence confirms the existence of long-run relationship among the variables. Financial development appears to increase environmental degradation in India. The main contributors to environmental degradation are: economic growth, energy consumption financial development and urbanization. The results also lend support to the existence of environmental Kuznets curves for Indian economy. Research limitations/implications – The present study suggests that environmental degradation can be reduced at the cost of economic growth or energy efficient technologies should be encouraged to enhance the domestic product with the help of financial sector by improving environmental friendly technologies from advanced economies. Originality/value – This paper proposes to make a contribution to the existing literature through examining the relationship between financial development and environmental degradation in Indian economy during 1971-2011 by employing modern econometric techniques.

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Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia

Energy Policy ◽

10.1016/j.enpol.2011.10.050 ◽

2012 ◽

Vol 40 ◽

pp. 473-479 ◽

Cited By ~ 306

Author(s):

Muhammad Shahbaz ◽

Hooi Hooi Lean

Keyword(s):

Energy Consumption ◽

Financial Development ◽

Increase Energy Consumption

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The Middle Path of Moderation in Islam

10.1093/acprof:oso/9780190226831.001.0001 ◽

2015 ◽

Cited By ~ 13

Author(s):

Mohammad Hashim Kamali ◽

Tariq Ramadan

Keyword(s):

Environmental Degradation ◽

Financial Crises ◽

Conceptual Analysis ◽

Modern World ◽

Continuity And Change ◽

Personal Character ◽

The World ◽

Historical Profile ◽

Moderating Role

This book is presented in two parts, consisting of a total of twenty-three chapters. Part One occupies seven chapters, which begin with a conceptual analysis of wasaṭiyyah, its meaning, definition, scope, and manifestations. This is followed by a review of the source evidence in the Qur’an and hadith, and then a round-up of modern opinion on wasaṭiyyah. The hallmarks of wasaṭiyyah and those of extremism, identification of wasaṭiyyah, its manifestations, and institutional developments on wasaṭiyyah are also discussed under Part One. Part Two looks into the various manifestations of wasaÏiyyah in the context, for instance, of religiosity, moderation and justice, environmental degradation, and financial crises the world has experienced in recent years. Other chapters that follow address subjects such as moderation in jihÉd, the moderating role of disagreement (ikhtilÉf), how wasaÏiyyah can be manifested with regard to women’s rights, the moderating influence of Sufism, wasaÏiyyah and globalization, and moderation in personal character and lifestyle. Two other chapters that appear toward the end bear the titles respectively of “Islam Between Antiquity and the Modern World” and “Reconciling the Concerns of Continuity and Change.” The former looks at Islam’s historical profile, how it played out its role of moderation in its relations with the outside world, whereas the latter looks into the ways Islam can moderate itself from within through the instrumentalities, for instance, of tajdid and islah (renewal and reform), respectively. In almost every chapter, the book explores Islamic principles and doctrines on a number of selected themes that seek to contextualize Islamic teachings with contemporary realities through the lenses of wasaṭiyyah. Part One thus focuses on a conceptual analysis of wasaṭiyyah and its understanding from a perusal of the Islamic text and doctrine, whereas Part Two presents a selected cluster of themes related to wasaṭiyyah and their application to contemporary issues.

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The role of financial development and corruption in environmental degradation of Sub-Saharan African countries

Management of Environmental Quality An International Journal ◽

10.1108/meq-09-2019-0190 ◽

2020 ◽

Vol 31 (4) ◽

pp. 895-913 ◽

Cited By ~ 3

Author(s):

Nura Sani Yahaya ◽

Mohd Razani Mohd‐Jali ◽

Jimoh Olajide Raji

Keyword(s):

Financial Development ◽

Environmental Degradation ◽

Empirical Studies ◽

Ordinary Least Squares ◽

Efficient Technology ◽

African Countries ◽

Credit Allocation ◽

Content Type ◽

Sub Saharan

PurposeThis study examines the role of financial development and its interaction with corruption in the environmental degradation of eight Sub-Saharan African countries from 2000–2014.Design/methodology/approachThe study utilizes Pedroni cointegration and fully modified ordinary least squares (FMOLS) techniques for the estimation of the models.FindingsThe results of the cointegration test reveal that there exist long-run relationships among the variables in the model with the interaction of financial development and corruption, and in the model without interaction. The FMOLS estimates show that in the former model, the interaction of financial development with corruption is positively significant in determining the level of environmental degradation in those countries. Moreover, in the latter, financial development, trade openness, and corruption have a positive effect on their environmental degradationResearch limitations/implicationsUnavailability of data, the study was limited to only eight Sub-Saharan African nationsPractical implicationsThe finding that financial development and its interaction with corruption have an adverse effect on the environments of the Sub-Saharan African countries implies the need to focus on how efficient credits are being allocated in those countries. For better management of environmental quality, this may require the implementation of policies that enhance credit allocation to users with energy-efficient technology and appliances that promote the quality of environments. In addition, stringent policies could be embarked upon to curtail all acts of corruption in the region for an efficient credit allocation and a better environment in the development of Sub-Saharan African society.Originality/valueThe dearth in empirical studies on the Sub-Saharan African countries motivates this study. In particular, little is known about the interaction effect of corruption and financial development on the environmental degradation of those countries, as the work on this is limited in the existing literature.

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