DOES THE EFFECT OF FINANCIAL DEVELOPMENT ON CARBON EMISSIONS VARY BETWEEN DEVELOPED AND DEVELOPING COUNTRIES?

Emrah Öget

Article Details

DOES THE EFFECT OF FINANCIAL DEVELOPMENT ON CARBON EMISSIONS VARY BETWEEN DEVELOPED AND DEVELOPING COUNTRIES?

Authors:

Emrah Öget

Publisher:

Zonguldak Bulent Ecevit University

Main Topics:

Uluslararası Finans

Journal:

Uluslararası Yönetim İktisat ve İşletme Dergisi Vol.20 Issue 4, pp.993-1009

Document Type:

Article

Publication Date:

12/2024

Document Language:

English

Document ID (Org No.):

2001336920

pISSN:

2147-9208

Keywords:

Abstract:

 This study examines the relationship between financial development and carbon emission for 21 developed and 22 developing countries throughout 2001-2020. There is heterogeneity in slope coefficient and cross-section dependence in residuals. For this reason, the second-generation panel unit root and cointegration tests were applied to investigate the integration order of the series and the longrun relationship, respectively. Additionally, this study utilized the pooled FMOLS and DOLS estimators to determine the long-run coefficients. While cointegration results confirm the long-run relationship between financial development and carbon emissions, pooled DOLS and FMOLS results show that financial development has an increasing effect on carbon emissions for both developed and developing countries. For the DOLS estimator, where statistically more significant results were obtained, individual DOLS results were examined, and it was seen that financial development reduced carbon emissions in approximately 55 of developed countries and approximately 28 of developing countries. It is understood that the positive effect of the pooled results originates from Belgium, Denmark, South Korea, and the United States, where financial development has a highly increasing effect on carbon emissions. These results cast doubt on the validity of the EKC hypothesis for these countries.

 This study examines the relationship between financial development and carbon emission for 21 developed and 22 developing countries throughout 2001-2020. There is heterogeneity in slope coefficient and cross-section dependence in residuals. For this reason, the second-generation panel unit root and cointegration tests were applied to investigate the integration order of the series and the longrun relationship, respectively. Additionally, this study utilized the pooled FMOLS and DOLS estimators to determine the long-run coefficients. While cointegration results confirm the long-run relationship between financial development and carbon emissions, pooled DOLS and FMOLS results show that financial development has an increasing effect on carbon emissions for both developed and developing countries. For the DOLS estimator, where statistically more significant results were obtained, individual DOLS results were examined, and it was seen that financial development reduced carbon emissions in approximately 55 of developed countries and approximately 28 of developing countries. It is understood that the positive effect of the pooled results originates from Belgium, Denmark, South Korea, and the United States, where financial development has a highly increasing effect on carbon emissions. These results cast doubt on the validity of the EKC hypothesis for these countries.

 This study examines the relationship between financial development and carbon emission for 21 developed and 22 developing countries throughout 2001-2020. There is heterogeneity in slope coefficient and cross-section dependence in residuals. For this reason, the second-generation panel unit root and cointegration tests were applied to investigate the integration order of the series and the longrun relationship, respectively. Additionally, this study utilized the pooled FMOLS and DOLS estimators to determine the long-run coefficients. While cointegration results confirm the long-run relationship between financial development and carbon emissions, pooled DOLS and FMOLS results show that financial development has an increasing effect on carbon emissions for both developed and developing countries. For the DOLS estimator, where statistically more significant results were obtained, individual DOLS results were examined, and it was seen that financial development reduced carbon emissions in approximately 55 of developed countries and approximately 28 of developing countries. It is understood that the positive effect of the pooled results originates from Belgium, Denmark, South Korea, and the United States, where financial development has a highly increasing effect on carbon emissions. These results cast doubt on the validity of the EKC hypothesis for these countries.

 Bu çalışmada, 2001-2020 dönemi için 21 gelişmiş ve 22 gelişmekte olan ülke için finansal gelişme ile karbon emisyonu arasındaki ilişki incelenmektedir. Kalıntılarda eğim katsayısı ve kesit bağımlılığında heterojenlik bulunmaktadır. Bu nedenle serinin bütünleşme derecesi ve uzun dönem ilişkisini araştırmak için sırasıyla ikinci nesil panel birim kök testi ve eşbütünleşme testi uygulanmıştır. Ayrıca, bu çalışmada uzun dönem katsayılarını belirlemek için birleştirilmiş FMOLS ve DOLS tahmin edicilerinden yararlanılmıştır. Eşbütünleşme sonuçları finansal gelişme ile karbon emisyonları arasındaki uzun dönemli ilişkiyi teyit ederken, panel DOLS ve FMOLS sonuçları finansal gelişmenin hem gelişmiş hem de gelişmekte olan ülkeler için karbon emisyonları üzerinde artırıcı bir etkiye sahip olduğunu göstermektedir. İstatistiksel olarak daha anlamlı sonuçların elde edildiği DOLS tahmin edicisi eneriçin ise bireysel DOLS sonuçları incelenmiş ve gelişmiş ülkelerin yaklaşık 55inde ve gelişmekte olan ülkelerin yaklaşık 28inde finansal gelişmenin karbon emisyonları üzerinde azaltıcı bir etkiye sahip olduğu görülmüştür. Panel sonuçlardaki pozitif etkinin, finansal gelişimin karbon emisyonları üzerinde oldukça artan bir etkiye sahip olduğu Belçika, Danimarka, Güney Kore ve Amerika Birleşik Devletleri ülkelerinden kaynaklandığı anlaşılmaktadır. Bu sonuçlar EKC hipotezinin geçerliliğinin bu ülkeler için şüpheli olduğunu göstermektedir.

Article Details

DOES THE EFFECT OF FINANCIAL DEVELOPMENT ON CARBON EMISSIONS VARY BETWEEN DEVELOPED AND DEVELOPING COUNTRIES?

Authors:

Emrah Öget

Publisher:

Zonguldak Bulent Ecevit University

Main Topics:

Uluslararası Finans

Journal:

Uluslararası Yönetim İktisat ve İşletme Dergisi Vol.20 Issue 4, pp.993-1009

Document Type:

Article

Publication Date:

12/2024

Document Language:

English

Document ID (Org No.):

2001336920

pISSN:

2147-9208

Financial Development

Carbon Emission

EKC hypothesis

DOLS

FMOLS: Finansal Gelişme

Karbon Emisyonu

EKC hipotezi

DOLS

FMOLS

Issues

Article Details

Authors: Emrah Öget

Publisher: Zonguldak Bulent Ecevit University

Main Topics: Uluslararası Finans

Journal: Uluslararası Yönetim İktisat ve İşletme Dergisi Vol.20 Issue 4, pp.993-1009

Document Type: Article

Publication Date: 12/2024

Document Language: English

Document ID (Org No.): 2001336920

pISSN: 2147-9208

Issues

Authors:

Emrah Öget

Publisher:

Zonguldak Bulent Ecevit University

Main Topics:

Uluslararası Finans

Journal:

Uluslararası Yönetim İktisat ve İşletme Dergisi Vol.20 Issue 4, pp.993-1009

Document Type:

Article

Publication Date:

12/2024

Document Language:

English

Document ID (Org No.):

2001336920

pISSN:

2147-9208