Abstract
We studied the influence of finance, natural resources, and governance on environmental degradation and economic growth for seven countries of the South Asian Association for Regional Cooperation (SAARC) using the latest panel data over 1996–2018. Panel cointegration tests and the long-run algorithms capable of addressing endogeneity and cross-sectional dependence have been applied to analyze the variables’ linkages. To explore the short-run causalities, we further utilized a panel heterogeneous causality test. Empirical estimates concluded that there is a mediating role of finance and governance on improving environmental quality and have a significant positive impression on the economic growth of the SAARC countries. The results supported the natural resources curse theory and substantially contributed to environmental emissions in the study area. The causal results concluded the unilateral causality from the environment to governance and bidirectional causality between finance and environmental degradation. Similarly, there were unilateral causal linkages between economic growth and natural resources, where links are bidirectional between natural resources and environmental degradation for SAARC countries. Based on the outcomes of the study, some policy implications are provided for theory and practice.
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The datasets used during the current study are available in the World Development Indicators (2019).
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Yang, Y., Khan, A. Exploring the role of finance, natural resources, and governance on the environment and economic growth in South Asian countries. Environ Sci Pollut Res 28, 50447–50461 (2021). https://doi.org/10.1007/s11356-021-14208-7
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DOI: https://doi.org/10.1007/s11356-021-14208-7