Open AccessFINANCIAL DEVELOPMENT, ENVIRONMENTAL QUALITY, TRADE OPENNESS AND ECONOMIC GROWTH: EMPIRICAL STUDY IN MENA COUNTRIES
Author(s) -
Sawssen Nafti
Publication year - 2021
Publication title -
international journal of advanced research
Language(s) - English
Resource type - Journals
ISSN - 2320-5407
DOI - 10.21474/ijar01/13504
Subject(s) - openness to experience , causality (physics) , economics , cointegration , environmental degradation , kuznets curve , panel data , environmental quality , macroeconomics , international economics , interdependence , financial sector development , granger causality , empirical evidence , monetary economics , econometrics , developing country , economic growth , ecology , political science , law , biology , psychology , social psychology , physics , quantum mechanics , philosophy , epistemology
In this paper, we empirically investigate the causal relationship between financial development, environmental degradation (CO2 emissions), trade openness and economic growth (GDP), using Panel data (the theory of cointegration Pedroni (1999,2004)) for 12 MENA countries ( Middle East and North Africa) during the period 1990- 2014.The long-term relationships estimated by the modified least squares technique proposed by Pedroni (1996). Our results indicate that there is evidence for a bidirectionel causality between CO2 emissions and economic growth. Economic growth and trade openness are interdependent, it exist a bidirectionel causality. Also, we confirm a bidirectional causality among trade openness and financial development. The unidirectional causality of financial development on economic growth and openness to CO2 emissions trading is identified. Our empirical results also verified the existence of the environmental Kuznets curve hypothesis by the causal link between GDP and environmental polution. Finally, panel causality verifies the existance of bidirectional relationship between economic growth(GDP), environmental degradation(CO2 emissions), financial development and trade openness. This empirical knowledge is of particular interest to policy makers as it helps us create sound economic policies to support economic development and improve environmental quality.