Does financial globalization uncertainty affect CO<sub>2</sub> emissions? Empirical evidence from some selected SSA countries

Ibrahim Sambo Farouq; Nuraddeen Umar Sambo; Ali Umar Ahmad; Aminu Hassan Jakada; Isma'il Aliyu Danmaraya; Ibrahim Sambo Farouq; Nuraddeen Umar Sambo; Ali Umar Ahmad; Aminu Hassan Jakada; Isma'il Aliyu Danmaraya

doi:10.3934/QFE.2021011

Quantitative Finance and Economics

2021, Volume 5, Issue 2: 247-263. doi: 10.3934/QFE.2021011

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Research article

Does financial globalization uncertainty affect CO₂ emissions? Empirical evidence from some selected SSA countries

1.
Faculty of Business Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia
2.
Development Impact Evaluation, World Bank, Nigeria
3.
Faculty of Maritime Management, Universiti Malaysia Terengganu, Malaysia
4.
Faculty of Art and Social Science, Federal University Dutse, Nigeria
5.
American University of Nigeria, Nigeria

Received: 04 January 2021 Accepted: 30 March 2021 Published: 06 April 2021
JEL Codes: F64, F65

Based on the Environmental Kuznets's Curve theory, this study seeks to investigate the asymmetric relationship between the financial globalization uncertainty and the environmental quality alongside the test of Kuznets's hypothesis. The research covers the data set of nine Sub Saharan African countries from 1980-2019. The Kuznets's hypothesis of the relationship between economic growth and the environment quality has been validated, identifying the pivotal point of the relationship's transition. The results further reveal that the positive shock of FGU is inversely related to CO₂ emissions, implying that as the foreign capital flow increases, the accompanying CO₂ emissions decreases. Whereas, the negative decomposed component of the financial globalization uncertainty indicates a negative and significance coefficient. While, renewable energy reduces the deterioration of the environmental quality. In the last part of the study, policy implications are recommended accordingly.
- environmental Kuznets curve,
- panel NARDL model,
- environment quality,
- financial development
Citation: Ibrahim Sambo Farouq, Nuraddeen Umar Sambo, Ali Umar Ahmad, Aminu Hassan Jakada, Isma'il Aliyu Danmaraya. Does financial globalization uncertainty affect CO2 emissions? Empirical evidence from some selected SSA countries[J]. Quantitative Finance and Economics, 2021, 5(2): 247-263. doi: 10.3934/QFE.2021011

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Abstract

Based on the Environmental Kuznets's Curve theory, this study seeks to investigate the asymmetric relationship between the financial globalization uncertainty and the environmental quality alongside the test of Kuznets's hypothesis. The research covers the data set of nine Sub Saharan African countries from 1980-2019. The Kuznets's hypothesis of the relationship between economic growth and the environment quality has been validated, identifying the pivotal point of the relationship's transition. The results further reveal that the positive shock of FGU is inversely related to CO₂ emissions, implying that as the foreign capital flow increases, the accompanying CO₂ emissions decreases. Whereas, the negative decomposed component of the financial globalization uncertainty indicates a negative and significance coefficient. While, renewable energy reduces the deterioration of the environmental quality. In the last part of the study, policy implications are recommended accordingly.

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