The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries
The aim and novelty of this study consist of estimating the nexus between CO<sub>2 </sub>(carbon dioxide) emissions, energy use, economic growth, and financial development for ten Central and Eastern European countries (CEEC) over the 2000–2017 period, starting from Environmental Kuznets...
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doaj-9f5e1680367f4552a8613358557fa0f12020-11-25T02:30:42ZengMDPI AGSustainability2071-10502020-09-01127747774710.3390/su12187747The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European CountriesAlina Georgiana Manta0Nicoleta Mihaela Florea1Roxana Maria Bădîrcea2Jenica Popescu3Daniel Cîrciumaru4Marius Dalian Doran5Department of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaDepartment of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaDepartment of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaDepartment of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaDepartment of Finance, Banking and Economic Analysis, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaDoctoral School of Economic Sciences, Faculty of Economics and Business Administration, University of Craiova, 13 A.I. Cuza Street, 200585 Craiova, RomaniaThe aim and novelty of this study consist of estimating the nexus between CO<sub>2 </sub>(carbon dioxide) emissions, energy use, economic growth, and financial development for ten Central and Eastern European countries (CEEC) over the 2000–2017 period, starting from Environmental Kuznets Curve (EKC) theory. The Fully Modified Ordinary Least Squares (FMOLS) method was used for testing the cointegration relationship. Granger causality estimation based on the Vector Error Correction Model (VECM) and Pairwise Granger causality test were applied to identify the causality relationships between the variables and to identify the direction of causality. The implementation of the tests led to significant conclusions. In the long run, the levels of CO<sub>2</sub> emissions and energy use do not have any influence on economic growth. Furthermore, there is a bidirectional causality among economic growth in terms of GDP and financial development variables. Thus, increasing financial development will generate more CO<sub>2</sub> emissions and more energy use, and increasing economic growth will lead to rising financial development. In the short run, increasing financial development will generate more CO<sub>2</sub> emissions and will lead to increased energy use and economic growth. Also, a bidirectional causality is being revealed between financial development and CO<sub>2</sub> emissions. This indicates that financial development may help to reduce CO<sub>2</sub> emissions.https://www.mdpi.com/2071-1050/12/18/7747climate changeeconomic systemfully modified OLS |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Alina Georgiana Manta Nicoleta Mihaela Florea Roxana Maria Bădîrcea Jenica Popescu Daniel Cîrciumaru Marius Dalian Doran |
spellingShingle |
Alina Georgiana Manta Nicoleta Mihaela Florea Roxana Maria Bădîrcea Jenica Popescu Daniel Cîrciumaru Marius Dalian Doran The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries Sustainability climate change economic system fully modified OLS |
author_facet |
Alina Georgiana Manta Nicoleta Mihaela Florea Roxana Maria Bădîrcea Jenica Popescu Daniel Cîrciumaru Marius Dalian Doran |
author_sort |
Alina Georgiana Manta |
title |
The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries |
title_short |
The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries |
title_full |
The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries |
title_fullStr |
The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries |
title_full_unstemmed |
The Nexus between Carbon Emissions, Energy Use, Economic Growth and Financial Development: Evidence from Central and Eastern European Countries |
title_sort |
nexus between carbon emissions, energy use, economic growth and financial development: evidence from central and eastern european countries |
publisher |
MDPI AG |
series |
Sustainability |
issn |
2071-1050 |
publishDate |
2020-09-01 |
description |
The aim and novelty of this study consist of estimating the nexus between CO<sub>2 </sub>(carbon dioxide) emissions, energy use, economic growth, and financial development for ten Central and Eastern European countries (CEEC) over the 2000–2017 period, starting from Environmental Kuznets Curve (EKC) theory. The Fully Modified Ordinary Least Squares (FMOLS) method was used for testing the cointegration relationship. Granger causality estimation based on the Vector Error Correction Model (VECM) and Pairwise Granger causality test were applied to identify the causality relationships between the variables and to identify the direction of causality. The implementation of the tests led to significant conclusions. In the long run, the levels of CO<sub>2</sub> emissions and energy use do not have any influence on economic growth. Furthermore, there is a bidirectional causality among economic growth in terms of GDP and financial development variables. Thus, increasing financial development will generate more CO<sub>2</sub> emissions and more energy use, and increasing economic growth will lead to rising financial development. In the short run, increasing financial development will generate more CO<sub>2</sub> emissions and will lead to increased energy use and economic growth. Also, a bidirectional causality is being revealed between financial development and CO<sub>2</sub> emissions. This indicates that financial development may help to reduce CO<sub>2</sub> emissions. |
topic |
climate change economic system fully modified OLS |
url |
https://www.mdpi.com/2071-1050/12/18/7747 |
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