Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches

Fiscal policy is a crucial government tool for influencing and managing the national economy and creating a strong incentive for low carbon investment. Previous literature has reputable evidence that improving fiscal policy enhances environmental quality. However, the literature fails to classify the exact turning level (threshold point) below/above which the association may be negative or positive. In this regard, this research investigates the nexus between fiscal policy, foreign direct investment, financial development, trade openness, urban population, gross capital formation, labour force, and CO2 emissions in the era of globalization. The panel data set contained 105 countries over the period from 1990 to 2016. The empirical findings are estimated through linear and nonlinear panel data approaches such as fully modified ordinary least square and panel threshold regression. The subsequent findings are established: first, fiscal policy and globalization significantly increase environmental pollution. Second, the empirical results confirm the existence of the pollution haven hypothesis (PHV). Third, financial development and gross fixed capital formation are also considered some of the most crucial indicators to increase pollution levels. Fourth, trade openness, urban population, and labour force improve environmental quality. Fifth, panel threshold regression discovers that countries maintain a minimum level of fiscal policy at −1.2889. Based on these empirical findings, this study suggests that policymakers and governments of these countries should take steps to restructure their industrial sector and design macroeconomic-level carbon-free policies to support the implementation of low-energy-intensive and lower carbon production technologies.

Tourism and environmental performance: New evidence using a threshold regression analysis

To verify whether the effect of tourism on environmental performance differs by the level of tourism development, a panel threshold regression approach is applied to observe the effects of tourism on environmental performance in 97 countries over the 2002–2012 periods. Our results suggest that tourism always has a significant negative influence on the environmental performance, implying that tourism will unavoidably result in environmental degradation, irrespective of how high the level of tourism development. However, when tourism development exceeds a certain value, tourism will relatively have less influence on environmental performance. In terms of policy prescriptions, considering that tourism wills inevitably worse environmental qualities, this finding implies that policymakers should consider the optimal level of tourism development at around the estimated threshold level to minimize the negative impact of tourism on environmental quality.

Does the Economic Growth Improve Public Health? A Cross-Regional Heterogeneous Study in China

On public health, the effect of economic growth in China is analyzed in this paper by using the panel threshold regression model. The empirical study from 2000 to 2017 shows that China's economic growth has a significant threshold effect on public health. After the threshold is exceeded, public health will be improved dramatically. The threshold effect is heterogeneous at the regional level. The eastern region has no threshold, and both central and western regions have a single significant threshold. However, the threshold value and threshold effect in the central and western regions are also different. The heterogeneity is caused by the different levels of regional economic development. Therefore, based on public health utility maximization, the government should make different health policies according to the characteristics of regional development.

Foreign direct investment and poverty reduction in sub-Saharan Africa: does environmental degradation matter?

This paper investigates the threshold effect of environmental degradation on the FDI-poverty nexus in sub-Saharan Africa for the period 1986–2018. The study used panel threshold regression for the empirical analysis. The evidence from threshold regression using different measures of poverty and environmental degradation shows that the poverty reduction effect of FDI is not eroded by environmental degradation. The study found overwhelming evidence that at the higher level of environmental degradation, FDI contributes significantly to poverty reduction except when Household final consumption is used to proxy poverty and FDI produces an insignificant effect on poverty reduction at the higher level of methane emissions and nitrous oxide emission. Based on this finding, any attempts to reduce environmental degradation by reducing the inflow of FDI will worsen poverty rates in the region.