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Environmental quality indicators and financial development in Malaysia: unity in diversity

Environmental quality indicators are crucial for responsive and cost-effective policies.The objective of the study is to examine the relationship between environmental quality indicators and financial development in Malaysia. For this purpose, the number of environmental quality indicators has been...

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Main Authors:	Alam, Arif, Azam, Muhammad, Abdullah, Alias, Malik, Ihtisham Abdul, Khan, Anwar, Tengku Hamzah, Tengku Adeline Adura, Faridullah, Faridullah, Khan, Muhammad Mushtaq, Zahoor, Hina, Zaman, Khalid
Format:	Article
Published:	Springer Berlin Heidelberg 2015
Subjects:	GE Environmental Sciences HG Finance
Online Access:	http://repo.uum.edu.my/18735/ http://doi.org/10.1007/s11356-014-3982-5
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spelling	my.uum.repo.187352016-12-07T01:11:17Z http://repo.uum.edu.my/18735/ Environmental quality indicators and financial development in Malaysia: unity in diversity Alam, Arif Azam, Muhammad Abdullah, Alias Malik, Ihtisham Abdul Khan, Anwar Tengku Hamzah, Tengku Adeline Adura Faridullah, Faridullah Khan, Muhammad Mushtaq Zahoor, Hina Zaman, Khalid GE Environmental Sciences HG Finance Environmental quality indicators are crucial for responsive and cost-effective policies.The objective of the study is to examine the relationship between environmental quality indicators and financial development in Malaysia. For this purpose, the number of environmental quality indicators has been used, i.e., air pollution measured by carbon dioxide emissions, population density per square kilometer of land area, agricultural production measured by cereal production and livestock production, and energy resources considered by energy use and fossil fuel energy consumption, which placed an impact on the financial development of the country.The study used four main financial indicators, i.e., broad money supply (M2), domestic credit provided by the financial sector (DCFS), domestic credit to the private sector (DCPC), and inflation (CPI), which each financial indicator separately estimated with the environmental quality indicators, over a period of 1975–2013. The study used the generalized method of moments (GMM) technique to minimize the simultaneity from the model. The results show that carbon dioxide emissions exert the positive correlation with the M2, DCFC, and DCPC, while there is a negative correlation with the CPI.However, these results have been evaporated from the GMM estimates, where carbon emissions have no significant relationship with any of the four financial indicators in Malaysia. The GMM results show that population density has a negative relationship with the all four financial indicators; however, in case of M2, this relationship is insignificant to explain their result. Cereal production has a positive relationship with the DCPC, while there is a negative relationship with the CPI.Livestock production exerts the positive relationship with the all four financial indicators; however, this relationship with the CPI has a more elastic relationship, while the remaining relationship is less elastic with the three financial indicators in a country.Energy resources comprise energy use and fossil fuel energy consumption, both have distinct results with the financial indicators, as energy demand have a positive and significant relationship with the DCFC, DCPC, and CPI, while fossil fuel energy consumption have a negative relationship with these three financial indicators.The results of the study are of value to both environmentalists and policy makers. Springer Berlin Heidelberg 2015 Article PeerReviewed Alam, Arif and Azam, Muhammad and Abdullah, Alias and Malik, Ihtisham Abdul and Khan, Anwar and Tengku Hamzah, Tengku Adeline Adura and Faridullah, Faridullah and Khan, Muhammad Mushtaq and Zahoor, Hina and Zaman, Khalid (2015) Environmental quality indicators and financial development in Malaysia: unity in diversity. Environmental Science and Pollution Research, 22 (11). pp. 8392-8404. ISSN 0944-1344 http://doi.org/10.1007/s11356-014-3982-5 doi:10.1007/s11356-014-3982-5
institution	Universiti Utara Malaysia
building	UUM Library
collection	Institutional Repository
continent	Asia
country	Malaysia
content_provider	Universiti Utara Malaysia
content_source	UUM Institutionali Repository
url_provider	http://repo.uum.edu.my/
topic	GE Environmental Sciences HG Finance
spellingShingle	GE Environmental Sciences HG Finance Alam, Arif Azam, Muhammad Abdullah, Alias Malik, Ihtisham Abdul Khan, Anwar Tengku Hamzah, Tengku Adeline Adura Faridullah, Faridullah Khan, Muhammad Mushtaq Zahoor, Hina Zaman, Khalid Environmental quality indicators and financial development in Malaysia: unity in diversity
description	Environmental quality indicators are crucial for responsive and cost-effective policies.The objective of the study is to examine the relationship between environmental quality indicators and financial development in Malaysia. For this purpose, the number of environmental quality indicators has been used, i.e., air pollution measured by carbon dioxide emissions, population density per square kilometer of land area, agricultural production measured by cereal production and livestock production, and energy resources considered by energy use and fossil fuel energy consumption, which placed an impact on the financial development of the country.The study used four main financial indicators, i.e., broad money supply (M2), domestic credit provided by the financial sector (DCFS), domestic credit to the private sector (DCPC), and inflation (CPI), which each financial indicator separately estimated with the environmental quality indicators, over a period of 1975–2013. The study used the generalized method of moments (GMM) technique to minimize the simultaneity from the model. The results show that carbon dioxide emissions exert the positive correlation with the M2, DCFC, and DCPC, while there is a negative correlation with the CPI.However, these results have been evaporated from the GMM estimates, where carbon emissions have no significant relationship with any of the four financial indicators in Malaysia. The GMM results show that population density has a negative relationship with the all four financial indicators; however, in case of M2, this relationship is insignificant to explain their result. Cereal production has a positive relationship with the DCPC, while there is a negative relationship with the CPI.Livestock production exerts the positive relationship with the all four financial indicators; however, this relationship with the CPI has a more elastic relationship, while the remaining relationship is less elastic with the three financial indicators in a country.Energy resources comprise energy use and fossil fuel energy consumption, both have distinct results with the financial indicators, as energy demand have a positive and significant relationship with the DCFC, DCPC, and CPI, while fossil fuel energy consumption have a negative relationship with these three financial indicators.The results of the study are of value to both environmentalists and policy makers.
format	Article
author	Alam, Arif Azam, Muhammad Abdullah, Alias Malik, Ihtisham Abdul Khan, Anwar Tengku Hamzah, Tengku Adeline Adura Faridullah, Faridullah Khan, Muhammad Mushtaq Zahoor, Hina Zaman, Khalid
author_facet	Alam, Arif Azam, Muhammad Abdullah, Alias Malik, Ihtisham Abdul Khan, Anwar Tengku Hamzah, Tengku Adeline Adura Faridullah, Faridullah Khan, Muhammad Mushtaq Zahoor, Hina Zaman, Khalid
author_sort	Alam, Arif
title	Environmental quality indicators and financial development in Malaysia: unity in diversity
title_short	Environmental quality indicators and financial development in Malaysia: unity in diversity
title_full	Environmental quality indicators and financial development in Malaysia: unity in diversity
title_fullStr	Environmental quality indicators and financial development in Malaysia: unity in diversity
title_full_unstemmed	Environmental quality indicators and financial development in Malaysia: unity in diversity
title_sort	environmental quality indicators and financial development in malaysia: unity in diversity
publisher	Springer Berlin Heidelberg
publishDate	2015
url	http://repo.uum.edu.my/18735/ http://doi.org/10.1007/s11356-014-3982-5
_version_	1644282522120486912
score	13.211869

Environmental quality indicators and financial development in Malaysia: unity in diversity

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