Financial Development and Environmental Degradation in ASEAN-5
This study investigates the relationship between financial development and environmental degradation in ASEAN-5 countries namely Indonesia, Malaysia, Philippines, Singapore, and Thailand over the period of 2000 to 2014. The Panel Unit Root test, Panel Cointegration test, Vector Error Correction M...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | en |
| Published: |
Human Resource Management Academic Research Society (HRMARS)
2018
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/25335/3/Financial.pdf http://ir.unimas.my/id/eprint/25335/ http://dx.doi.org/10.6007/IJARBSS/v8-i12/4987 |
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| Summary: | This study investigates the relationship between financial development and environmental
degradation in ASEAN-5 countries namely Indonesia, Malaysia, Philippines, Singapore, and Thailand
over the period of 2000 to 2014. The Panel Unit Root test, Panel Cointegration test, Vector Error
Correction Model (VECM) Granger Causality, and Fully Modified Ordinary Least Square (FMOLS) are
used in this study to examine the short-run and the long-run as well as the causality relationship
among the variables. Variables employed in this study are carbon dioxide (CO2) emissions, foreign
direct investment (FDI), private domestic credit (DC), and market capitalization (MC). The empirical
findings show that all the variables are stationary at order I(1) and there is a cointegration relationship
among the variables. The results show that there is a bidirectional causality relationship between the
CO2 and FDI. Meanwhile, there is a unidirectional causality running from CO2 to DC, MC to FDI, and
MC to DC respectively. The strong policy and institution structures are suggested to improve
environmental degradation through new technologies and financial development and financial
reforms play a role in protecting the environment. |
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