Exploring The Nexus Between Economic Growth, Financial Development and Co2 Emission in Gulf Countries: An Application of Environmental Kuznets Curve

Abstract

The main objective of the current study is to investigate the impact of economic growth, financial development (both the development and shock), and energy consumption on the CO2 emission in the selected Gulf Countries. This research study incorporates financial development as the measurement of environmental quality. In this way, it will add to the existing literature. The use of NARDL has been made in this research, which is an advanced econometric approach. An efficient way of dealing with the component of asymmetry in financial development on emissions of CO2 has been provided by NARDL with reference to the economy of Gulf countries for time 1980–2014. According to the findings of the study, the financial development, energy consumptions and GDP growth are in positive and significant relationship with CO2 emission. Thus, the findings of the study are providing support to the argument broached in the study that financial development, energy consumption and economic growth are linked with CO2 emission. The study which is among the pioneering study will be helpful for policymakers, environmental economist and researchers in explaining the impact of financial development and economic growth on environmental related issues such as CO2 emission