This paper investigates the linkage between natural resources and financial development by considering oil prices, economic growth and economic globalization as additional determinants in finance ...demand function for case of Pakistan over the period of 1972–2017. In doing so, we have applied long run covariability developed by Muller and Watson (2018) and robustness of empirical results is tested by applying cross-quantilogram introduced by Han et al. (2016). The empirical evidence reveals that natural resource abundance is positively correlated with financial development i.e. natural resources are blessing for financial development. Oil prices have positive effect on financial development. Economic growth has positive and significant impact on financial development. Contrarily, economic globalization hinders financial development. The empirical evidence indicates new insights for policy makers to use natural resources as economic tool to increases financial development for long run.
•The role of natural resources in finance-growth nexus is analyzed.•Annual data for Pakistan over the 1972–2017 period are used.•Natural resources are blessing for financial development.•Oil prices and economic growth have positive effect on financial development.•Economic globalization hinders financial development.
Many countries are actively pursuing tourism-oriented policies to boost their economic growth. Tourism as an essential economic activity in most countries not only generates revenue but also develops ...infrastructures and creates jobs and investment opportunities. Several factors can affect the tourism activities of a country. This study investigates the impacts of terrorism, governance structure, military expenditures, and physical and ICT infrastructures upon tourism in an emerging economy, Pakistan. The ARDL bounds testing approach to cointegration is applied with data for the period of 2002Q1–2016Q4. The empirical results show that terrorism, military expenditures, and physical and ICT infrastructures have adverse impacts on tourism both in the short run and in the long run. The governance structure has a positive impact on tourism. Nevertheless this impact, as well as the impact of terrorism, is not significant. The findings from Johansen cointegration and dynamic ordinary least square approaches corroborate the results. This study proposes that governance structure, and physical and ICT infrastructures be improved to promote tourism activities. It is also suggested that more effective measures rather than mere military actions be taken to curtail terrorism and develop tourism. Detailed policy implications are also discussed.
The relationship between natural resource abundance and environmental degradation has important environmental implications. However, this domain is insufficiently investigated, and diverse findings ...are evident in the literature. The significant economic growth, along with rapid urbanization and industrialization, has increased the extraction and consumption of natural resources in China. Therefore, this study investigates the effect of natural resources abundance, human capital, and urbanization on the ecological footprint in China, controlling economic growth. The study uses the famous Bayer and Hack cointegration test, and bootstrap causality technique to study cointegration and causal association among variables. The findings of the study confirm the long-run equilibrium relationship among variables. The long-run results reveal that natural resource rent increases the ecological footprint. Urbanization and economic growth contribute to environmental degradation, whereas human capital mitigates environmental deterioration. Interestingly, the interaction between urbanization and human capital helps in alleviating environmental degradation, which indicates a moderating effect of human capital in promoting sustainable urbanization. The estimates of the bootstrap causality method disclose unidirectional causality from natural resources to the ecological footprint. Urbanization also Granger-causes ecological footprint without any feedback. The results are also compared and verified using carbon footprint as an additional proxy for environmental degradation. Lastly, comprehensive policy measures are proposed to improve environmental quality.
•Analysed the impact of natural resources, human capital, and urbanization on the ecological footprint in China.•The Bayer-Hanck cointegration test and bootstrap causality, are employed.•Natural resources and urbanization increase the ecological footprint.•Human capital reduces environmental deterioration.•The interaction between urbanization and human capital decreases environmental degradation.
This paper examines the link between financial development and economic growth in Pakistan by considering important role of natural resources in production function for the period of 1972–2017. ...Capital and labour are additional contributing factors of economic growth. To determine the integrating properties of the variables, we apply SOR unit root test containing information for sharp and smooth structural breaks in the series. We also employ the bootstrapping ARDL bounds testing approach to examine the cointegration between the factors of production. The causal relationship between financial development, natural resources, capital, labour and economic growth is tested by applying the VECM Granger causality test in the presence of structural breaks.
The empirical findings indicate that financial development, natural resources, capital, labour and economic growth are cointegrated for long-run association. Additionally, financial development enhances domestic production as well as economic growth. Natural resources as blessings hypothesis is validated. Capital and labour also add to economic growth. The VECM Granger causality test results show the bidirectional causal relationship between financial development and economic growth. The feedback effect also exists between natural resources and economic growth. This paper helps policy makers in designing a comprehensive policy for strengthening finance-growth by using natural resources as an economic tool.
•The role of natural resources in finance-growth nexus is analyzed using bootstrap ARDL modelling.•Annual data for Pakistan over the 1972–2017 period are used.•Financial development, natural resources, capital, labour and economic growth are cointegrated for long-run association.•Financial development enhances domestic production in Pakistan.•The feedback also exists between natural resources and economic growth.
The objective of this study was to explore the roles of technological innovation, environmental regulations, and urbanization in ecological efficiency within the context of the 2015 Paris agreement. ...Initially, the study employed the super-efficiency DEA model to estimate the ecological efficiencies of 30 regions in China. Following this, the system GMM method was used to explore the impacts of technological innovation, environmental regulations, and urbanization on ecological efficiency. We used annual data from 2008 to 2018. The results indicate that, in terms of ecological efficiency, the eastern region was the highest ranked, followed by central and western regions, respectively. The urbanization index has a negative impact on ecological efficiency at a national level. However, in the context of regions, it is positively significant in the eastern region, while the results in the central and western regions are insignificant. The influence of technological innovation on ecological efficiency is found to be significantly positive at both national and regional levels. It is generally perceived that environmental regulations are pivotal for sustainability. Our results verify this argument and indicate that environmental regulations have a positive impact on ecological efficiency in the central and eastern regions. However, their impact is found to be negative in the western region. Policy suggestions are discussed, in order to further strengthen environmental laws and sustainability.
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•Super Efficiency DEA and System GMM methods are used.•Environmental regulations are essential for sustainability.•Technological innovation can play a pivotal role toward ecological efficiency.•Eastern region is found high ecological efficient compared with other regions.
This study deals with the linkages between financial development and poverty reduction in Egypt using data for the period of 1975Q1–2011Q4. The stationarity properties of the variables are tested by ...applying Zivot–Andrews structural break unit root test. The structural break autoregressive distributed lag-bounds testing approach to cointegration is used to examine long run relationship between the variables. Our results show evidence of cointegration which confirms the presence of long run relationship between financial deepening, economic growth and poverty reduction. The results indicate that financial development reduces poverty when domestic credit to the private sector is used as proxy for financial development. The direct channel that financial sector development can lead to enabling the poor to access or broaden their access to financial services, such as credit and insurance-risk services, is therefore confirmed in case of Egypt. Furthermore, the indirect channel where financial sector development contributes to poverty reduction through economic growth is also confirmed for Egypt. This is only found when M2 is used as a proxy for financial development and infant mortality per capita as proxy for poverty. While our results show that the causal relationship between financial development and poverty reduction in Egypt is sensitive to the proxy used to measure these variables, the results show that the poverty-reduction programs are desirable in Egypt, not only because they reduce poverty but also because they possibly lead to further development of financial sector in long run. Furthermore, our results show that appropriate reforms aimed at developing a financial sector in Egypt that is well-organized and spread throughout the country can help reduce poverty by availing more domestic credit to the poor.
•Effect of natural resources abundance on energy consumption in Pakistan.•Quarterly data for Pakistan over the 1972–2018 period are used.•Positive cumulative short-run effect of natural resources on ...energy consumption.•Economic growth and oil prices add to energy consumption.•Causality from natural resources, economic growth and oil prices to energy consumption.
Unlike prior studies, this paper examines the nonlinear and distributional asymmetric effects of natural resources abundance on energy consumption in Pakistan controlling for the effects of economic growth, oil prices, exports diversification and economic complexity. Using quarterly data over the period 1972–2018, we employed several advanced econometric techniques such as quantile unit root test developed by Köenker and Xiao (2004) is used to check the stationarity of the variables at different quantiles. Afterwards, the quantile ARDL model is employed to account for the distributional asymmetry between energy consumption and its determinants. Lastly, we apply quantile causality test of Troster (2018) in order to examine causality at different quantiles. The empirical results show that speed of adjustment parameter is significantly negative at the low quantiles (0.05 to 0.30) ensuring thus the stability of ARDL model at these quantiles. Furthermore, natural resources have a positive contemporaneous effect on energy consumption and a negative one-period lagged effect, leading to a positive cumulative short-run effect of natural resources on energy consumption. Similarly, economic growth and oil prices add to energy consumption. Export diversification does not determine energy consumption in the short-run but economic complexity influences energy consumption contemporaneously and negatively at all quantiles but the extreme ones. The causality analysis reveals the presence of causal relation running from natural resources, economic growth and oil prices, to energy consumption at all quantiles except at the two highest quantiles (0.90 and 0.95). Energy consumption is cause of exports diversification and economic complexity. This empirical evidence opens new insights for policy makers to use natural resources as economic tool to maintain energy demand for long run economic growth.
Air quality is a social, economical, and health issue for fast-developing countries such as China. Due to the overuse of nonrenewable energy, industrialization, and the population put pressure on air ...quality, which seriously threatens public health and economic growth. This study focuses on air quality and also aims to investigate the short-and long-run correlation between foreign direct investment, energy consumption, domestic credit, and financial development. The Autoregressive distributed lag model and the Granger non-causality test were carried out over the period from 1985 to 2018. The main findings of this study show a positive and significant long-run impact of energy consumption on air quality. In addition, domestic credit and financial development similarly show a significant positive short-run association with air quality. Moreover, the unidirectional causality correlation running from foreign direct investment and domestic credit to air quality was concluded by the Granger non-causality test. Considering the empirical analysis, this study suggests that domestic financial institutions should offer credit to industries at a low-interest rate in order to help them to switch from non-renewable to renewable energy consumption towards the promotion of sustainable and healthy air quality.
•Nexus of foreign direct investment, financial development, energy consumption, and air quality.•ARDL model was analyzed to investigate the long-run and short-run nexus.•Energy consumption positively and significantly long-run affect air quality.•Domestic credit and financial development show a short-run positive effect air quality.
This study examines the significance of technological industry and forest on environmental footprints. As control variables, we included renewable energy, and urbanization for econometric ...estimations. Contrary to what has been published in the literature, the forest coefficients are negligible. In contrast, the current study confirms the importance of technology and renewable energy in reducing environmental footprints, indicating that environmental degradation can be reduced by shifting toward technological industry and changing the energy market by increasing the percentage of sustainable energy. In Saudi Arabia, on other hand, urbanization is the source of increased environmental footprints. In short-run estimations, the studied variables are insignificant to have an impact on environmental footprint. According to Vision 2030, the findings are similar to policies, particularly for forestation, need to be adjusted. The role of forest remains insignificant, indicating that forestation must be addressed urgently. The findings are intriguing and have significant policy implications for environmental policymakers.
•This study examines the role of tech-industry and natural resources on environmental footprint.•The results of forest are insignificant to control the environmental damages, which is contradicting the literature.•Tech-industry and renewable energy are useful to minimize the environmental footprint.•In short-run estimations, the studied variables are insignificant to have an impact on environmental footprint.
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