Financial Development, Environmental Quality and Economic Growth

Shushu Li · Jinglan Zhang · Yong Ma

85 citations0/0 files storedSustainability

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Energy, Environment, Economic Growth Monetary Policy and Economic Impact Economic Growth and Development

Abstract

In this study, the relationships between financial development, environmental quality and economic growth are studied based on data from 102 countries over the period 1980–2010 using the generalized method of moments (GMM) estimation. The econometric results show the following three basic conclusions: First, both financial development and environmental quality have a significant impact on economic growth and should be included in the production function of the economic growth model as important variables. Second, there is a significant and robust “inverted U-shaped” relationship between financial development and economic growth; with the improvement of the level of financial development, economic growth would first increase and then decrease, which is consistent with the results of previous studies. Third, there is also a significant and robust “inverted U-shaped” relationship between economic growth and carbon emissions, indicating that there exists a “critical point” at which achieving economic growth comes at the expense of environmental quality, and after passing the critical point, the deterioration of environmental quality will lead to a significant slowdown in economic growth. In addition, the econometric analysis in this paper also shows that there was a mutually promoting and strengthening relationship between financial development and environmental quality. Specifically, the degree of financial development can further strengthen the promoting effect of environmental quality on economic growth; meanwhile, an improvement in environmental quality can also strengthen the promoting effect of financial development on economic growth. Financial development and environmental quality could influence economic growth through strengthening the marginal product effects of capital and labor, which further indicates the that both financial and environmental factors play an important role in modern economic development.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 85 citations exist upstream.

References

1991Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations 1998Initial conditions and moment restrictions in dynamic panel data models 1995Another look at the instrumental variable estimation of error-components models 1995Initial conditions and moment restrictions in dynamic panel data models 1994Economic Growth and the Environment 2000Financial intermediation and growth: Causality and causes 1994Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?2008Does higher economic and financial development lead to environmental degradation: Evidence from BRIC countries

Cited by

2021Impact of remittances on carbon emission: fresh evidence from a panel of five remittance-receiving countries 2020Remittances and CO2 emissions in Jamaica: An asymmetric modified environmental kuznets curve 2022The nexus between remittances, natural resources, technological innovation, economic growth, and environmental sustainability in Pakistan 2022Globalization, industrialization, and urbanization in Belt and Road Initiative countries: implications for environmental sustainability and energy demand

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.