The Impact of Commercial Sectors on Environmental Quality: A Case Study of Tabriz's Ecosystem and Financial Landscape

Abstract

Commercial sectors play a crucial role in the national economy by facilitating resource accumulation through both small and large savings, optimizing the distribution of financial resources, and directing them towards the costs and investment requirements of productive sectors. Most research exploring the link between economic growth and environmental factors is grounded in the Kuznets hypothesis. The findings indicate a unidirectional relationship between financial development and gas emissions. Specifically, the ratio of domestic credit to the private sector, expressed as a percentage of GDP, positively influences financial markets and significantly impacts biogas emissions in selected middle-income nations. Consequently, the hypothesis asserting a significant relationship between domestic credit to the private sector (as a percentage of GDP) and environmental gas emissions cannot be dismissed. Additionally, the ratio of traded stocks to the volume of stock market transactions, serving as a capital market indicator, has a positive and significant effect on emissions, reinforcing its role as an environmental quality indicator in the co-gas group of the two selected middle-income countries. Thus, the hypothesis regarding the significant relationship between the ratio of traded stocks and gas emissions as an environmental quality indicator remains valid. Based on the findings of this study, several recommendations are proposed: Reducing government size to foster greater non-governmental sector participation, enhancing public awareness across various demographics through media to mitigate environmental pollution, discouraging foreign investment in polluting industries, and promoting the establishment and development of environmental protection organizations through training and resource allocation.