Common Correlated Effects Mean Group Research Articles

Foreign Direct Investment, Technological Innovations, Energy Use, Economic Growth, and Environmental Sustainability Nexus: New Perspectives in BRICS Economies

In the current era, economic growth is inevitable for global prosperity but achieving sustainable economic development is one of the significant challenges for the developing world. The present study explores the impacts of foreign direct investment, energy use, and technological innovations on the economic growth and environmental quality of BRICS countries for the period 1990–2018. We used the augmented mean group (AMG), the common correlated effects mean group estimator (CCEMG), and several other modern-day empirical techniques to analyze data. The findings show that foreign direct investment increases economic growth but harms the environmental sustainability of BRICS countries. Moreover, we have seen that energy use is directly proportional to economic growth and CO2 emissions. This confirms that energy use is one of the factors which harms the environmental quality in BRICS economies. Likewise, economic growth increases CO2 emissions. On the other hand, technology innovation has a direct relationship with economic growth but an inverse relationship with CO2 emissions as it improves the environmental sustainability of the BRICS region. This research adds to the existing literature by exploring the interplay between FDI, innovation, energy use, economic growth, and environmental outcomes in the context of major emerging economies. The study’s findings provide empirical evidence on the role of these factors in shaping the environmental outcomes in the BRICS economies, and they have implications for policymakers and stakeholders in addressing environmental challenges such as global warming and climate change.

Proposal of fishing load capacity curve and testing validity: Evidence from top 20 countries with highest fisheries production by panel data approaches

This study investigates the validity of the Environmental Kuznets Curve (EKC) and the proposed Fishing Load Capacity Curve (FLCC) for the top 20 fishing countries. To this end, the study applies second-generation panel data approaches (panel LM cointegration test, common correlated effect mean group, and Dumitrescu-Hurlin panel causality test) for the period between 2000 and 2018. In this way, the study contributes by proposing the FLCC hypothesis, which implies that fishing load capacity (biocapacity of fishing areas divided by the footprint on those areas) first decreases with rising per capita income and then increases above a certain level of wealth. Such an approach can provide a good environmental assessment of fisheries sustainability because it considers both supply and demand aspects of water resources. The results demonstrate that both the EKC and FLCC hypotheses are valid, that fisheries production affects the quality of fishing areas, and that container port traffic has no effect on fishing load capacity.

The Dynamic effects of Foreign Direct Investment Services and Energy Consumption on Information and Communication Technology Sector

This study scrutinises the influence of foreign direct investment (FDI) inflows, energy consumption on Information and Communication services (ICTs) in selected economies of South Asia. This research is based on heterogenous and second generation framework of panel data-set from 1999 to 2021. This study used augmented mean group (AMG), mean group (MG), and common correlated effects mean group (CCEMG) assessors, which further promotes the substantial and favourable influence of FDI services, and energy consumption on ICTs. However, the impact of terrorism is insignificant on ICTs in the region of South Asia. The results indicate that economies of these region must embrace investment reform measures in order to draw FDI into the services sector, increase exports of services, and progress towards economic stability.

Empirical linkages of the construction sector, intensive energy consumption, and economic openness with chemical oxygen demand pollution.

Though construction sector development and economic openness contribute to regional economic development, they have also been debated to pose some environmental challenges. Along these lines, we explored the long- and short-term connections of intensive energy consumption, economic openness, and construction sector development with the chemical oxygen demand throughout the scales of regional development of China's 30 provincial units over the 2004-2021 period. Theoretically, we contribute to the existing knowledge by incorporating chemical oxygen demand pollution, construction sector development, and economic openness to the Kaya identity's baseline framework. Empirically, we apply a series of advanced methods of panel data econometrics for robust results. Our key findings are as follows: First, we revealed a long-term stable cointegrating association among our variables of interest. Second, using the common correlated effect mean group estimator, we unfolded that the intensive energy consumption showed a chemical oxygen demand pollution reduction influence in both the long and short term, demonstrating the most substantial influence in the high regional development panel while expressing the least powerful influence the least regional development setting. Third, we unveiled that economic openness and construction sector development showed a linear chemical oxygen demand pollution enhancement influence in moderately and least developed regions. Nevertheless, both established an inverted U-shaped linkage with chemical oxygen demand pollution for the whole country as well as for high regional development data samples. Eventually, we found consistent estimates across long- and short-term investigations regarding signs of relationships; however, long-term effects remained more powerful than short-term ones. These findings would serve as factual scientific knowledge to help local as well as national governments create the optimal environmental regulations for the construction sector to achieve the sustainable development goals (SDGs), especially the Climate Action Plan (i.e., SDG-13).

Renewable energy generation, agricultural value added and globalization in relation to environmental degradation in the five most populous countries in Asia

This study aims to examine the impact of globalization, renewable energy generation, and agricultural value addition on the ecological footprint (EF) and carbon emissions (CO2) of selected five most populous countries in Asia during the period 1975–2020. The Westerlund cointegration test supports long-term cointegration relationships among the considered variables in selected countries. The long-term elasticity results of the mean group, augmented mean group, and common correlated effects mean group estimators clearly show that agricultural value added and globalization make significant contributions to the ecological footprint and carbon emissions of the five most populous countries in Asia. However, renewable energy generation significantly reduces the ecological footprint and carbon emissions. Moreover, the impact of gross domestic product (GDP) on ecological footprint and carbon emissions is significantly positive while the impact of GDP2 on ecological footprint and carbon emissions is significantly negative, thus validating the inverted U-shaped Environmental Kuznets Curve hypothesis for specific Asian densely populated countries. The results of the causality test indicated a two-way causality between renewable energy generation and ecological footprint, supporting the feedback hypothesis. There is also a two-way causal relationship between agricultural value added and ecological footprint. Overall, these empirical results show that renewable energy plays a prominent role in combating environmental pollution in selected densely populated Asian countries. Thus, these countries should achieve their sustainable development goals by cultivating existing renewable energy generation policies. Moreover, specific densely populated countries in Asia should encourage clean energy production and consumption in the agricultural sector, and increased investment in renewable energy can improve environmental quality and agricultural production.

Achieving sustainable environment through infrastructure and energy structure developments: empirical evidence from BRICS.

The development of an environment that is sustainable requires infrastructure matching this goal. Moreover, it is almost impossible to achieve this goal without the requisite energy structure. Devising an energy structure that is both effective and efficient must precede the desired infrastructure to achieve sustainability goals. Therefore, it is important to look into the nexus of energy structure, infrastructure, and carbon emissions in "Brazil, Russia, India, China, and South Africa (BRICS)" countries under the growth and environment hypothesis. To empirically estimate the said nexus, robust econometric techniques are adopted. This paper employs panel data analysis techniques to investigate the relationship between infrastructure, energy consumption, and carbon emissions in the BRICS countries. The econometric estimation methodology includes a cross-sectional dependence test, unit root attribute of the panel data using the cross-sectionally augmented Im Pesaran and Shin(CIPS) test, and estimation of co-integration among the variables, and to address the issues in the panel data, augmented mean group (AMG) technique and common correlated effects mean group (CCEMG) estimator were employed. Findings suggest the existence of a supportive role of infrastructure and energy structure in abating carbon emissions. It is suggested that the BRICS economies need to enhance their investment in infrastructure and energy structure for them to create a sustainable environment. Findings are also robust to short- and long-run policy implications. This study is a step forward toward the Sustainable Development Goals (SDGs).

What role do international remittance inflows play in boosting agricultural productivity? Empirical analysis of emerging Asian economies

PurposeThis article investigates the long-run impact of remittance inflows on agricultural productivity (AGP) in emerging Asian economies (Bangladesh, Sri Lanka, Malaysia, India, Nepal, Philippines, Pakistan, and Vietnam), employing a panel dataset from 2000 to 2018.Design/methodology/approachThis study initially applies cross-sectional dependence (CSD), second-generation unit root, Pedroni, and Westerlund panel co-integration techniques. Next, it uses the augmented mean group (AMG) and common correlated effect mean group (CCEMG) methods to investigate the long-term impact of remittance inflows on AGP while controlling for several other important determinants of agricultural growth, such as cultivated area, fertilizers, temperature change, credit, and labor force.FindingsThe empirical findings are as follows: The results first revealed the existence of CSD and long-term co-integration between AGP and its determinants. Second, remittance inflows significantly boosted AGP, indicating that remittance inflows played a crucial role in improving AGP. Third, global warming (changes in temperature) negatively impacts AGP. Finally, additional critical elements, for instance, cultivated area, fertilizers, credit, and labor force, positively affect AGP.Research limitations/implicationsThis study suggests that policymakers of emerging Asian economies should develop an exclusive remittance-receiving system and introduce remittance investment products to utilize foreign funds and mitigate agricultural production risks effectively.Originality/valueThis is the first empirical examination of the long-term impact of remittance flows on agricultural output in emerging Asian economies. This study utilized robust estimation methods for panel data sets, such as the Pedroni, Westerlund, AMG, and CCEMG tests.

Devising strategies for sustainable development in sub-Saharan Africa: The roles of renewable, non-renewable energy, and natural resources

The Sub-Saharan African (SSA) countries are encountering difficulties in attaining sustainable development because of the non-alignment of the energy and climate policies with the human development aspects. The present study attempts to address this policy void by mainstreaming the human development aspects in the energy and climate policies of the SSA countries. In this pursuit, the impact of renewable, non-renewable energy and natural resources on sustainable development index is analyzed for 28 sub-Sahara African countries over 1990–2019. Presence of cross-sectional dependence is controlled through the application of Augmented Mean Group (AMG) and Common Correlated Effects Mean Group (CCEMG) estimation. The results reveal that renewable energy and natural resources have positive but insignificant impacts on sustainable development, while fossil fuel significantly and negatively affects sustainable development. The study outcomes are used to develop policy recommendations for the achievement of sustainable development in the SSA countries.

Ecological footprint-technological innovations nexus: new empirical evidence from panel data estimations.

The aim of this approach is to establish a relation between ecological footprint and technological innovations by using panel data techniques and taking Union for the Mediterranean member countries as the case. On the one hand, the Mediterranean region is an alarming region when it comes to environmental degradation; on the other hand, existing intergovernmental organizations such as the Union for the Mediterranean may provide a sound ground to take common action among all members against such a degradation. The approach takes eleven member countries from the Union for the Mediterranean (Bosnia and Herzegovina, France, Greece, Israel, Italy, Jordan, Morocco, Portugal, Spain, Tunisia, Türkiye) and observes them for the time frame 1992-2020. By using panel unit root tests and cross-sectional dependency tests, the data is being analyzed for further evaluation using mean group, common correlated effect mean group, and augmented mean group analysis. Regarding the observed variables, we could not identify a common trend for these eleven countries. For the sample of eleven countries, the impact of technological innovations was not significant, but country-level augmented mean group analysis results indicated that for Portugal, this impact was significant and positive.

Digital economy, resource richness, external conflicts, and ecological footprint: Evidence from emerging countries

The overexploitation and unsustainable utilization of important natural resources owing to economic progress have accelerated the negative externalities of overwhelming consumption leading to massive increases in ecological footprint. In addition, the situation of increasing conflicts poses severe challenges, such as energy insecurity, increased fossil fuel use, and environmental unsustainability. However, the transformation of energy systems and economic processes by stimulating clean energy utilization and supporting the process of digitalization may influence resource usage and environmental footprints. Accordingly, this study investigates the impact of natural resources, digital economy and clean energy on ecological footprint in emerging countries from 2003 to 2018 by including external conflicts in the model. The Common Correlated Effects Mean Group (CCEMG) method is employed which produces panel estimates robust to cross-sectional dependence (CSD) and slope heterogeneity. The empirical results indicate that natural resources expand footprints in emerging economies and pose serious threats to ecological quality. However, the digital economy and clean energy help to reduce ecological footprint. In addition, decreasing conflicts curtail ecological footprint while economic progress worsens environmental quality. Based on these estimates, comprehensive policies for energy transition, sustainable natural resource use, and digitalization are directed to support environmental quality.

The impact of natural resources on technology innovation from cross-country panel data: A comparative analysis and policy-level insights

The study aims to examine the direct impact of natural resources on technology innovation by considering the critical role of five dimensions of technology innovation (ICT development, R&D activity, skills, industry activity and access to finance). For this purpose, the common correlated effect mean group (CCEMG) estimator is applied to estimate cross-country panel data encompassing 102 countries from 2008 to 2018. Under the global sample, the empirical evidence strongly supports that natural resources hinder ICT development and R&D activity but have a positive impact on industry activity and access to finance, which shows a traceable path of the resource blessing. In addition, for overall technology innovation, ICT development, R&D and industry activity, the resource curse is effectively transformed into a resource blessing in high-income countries, which benefits from the high level of manufacturing, modern services and industrial structure. When considering the chronological evolution, natural resources show a negative effect on overall technology innovation in the first period and a positive effect in the second period in low-income countries. On this basis, challenges and initiatives in three phases are proposed to better achieve resource blessing, including resource regulation, human resource reserve, international trade adjustment, industrial structure transformation and financial investment optimization. Lastly, policy-level insights on the different dimensions of technology innovation are proposed to provide guidance and valuable reference for policymakers.

Exploring the roles of natural resources on sustainability blueprint in G7 countries amidst green energy, technological innovation, and carbon‐tax intervention

AbstractToday's global economy faces the most devastating challenges of global warming occasioned by overdependence on natural resources. Besides, the dilemma of choosing between economic benefits and environmental costs emanating from natural resources heightens the empirical relevance of green energy in recent times. To solve this developmental puzzle, the current study presents extends the knowledge frontier by evaluating the impacts of natural resource dependence, green energy (captured by biofuels and renewable energy), carbon tax, and technological innovation on environmental sustainability in G7 economies. The empirical model endogenizes environmental policy stringency and financial development from 1996 to 2019. The empirical verification anchors on second‐generation estimators entailing Cross‐Sectional Autoregressive Distributed Lag (CS‐ARDL), Common Correlated Effects Mean Group (CCEMG), augmented mean group (AMG), and novel Method of Moment Quantile Regression (MMQR). The fallouts from the analyses uncover that natural resource dependence militates against the attainment of the sustainability blueprint by escalating the surge in CO2 emissions in G7 countries. Similarly, the feedbacks from financial development support the surge in emissions. On the flip side, green energy, technological innovation, carbon tax, and environmental policy appear as effective tools for mitigating the surge. The Fully Modified Ordinary Least Square (FMOLS) estimator for the country‐specific analysis corroborates the panel findings. Additionally, two channels of causalities, including unidirectional and bidirectional nexuses, are apparent from the estimated model. Policy measures are suggested based on empirical findings.

Does technological progress make OECD countries greener? New evidence from panel CS-ARDL

PurposeThis paper aims to examine the impact of information and telecommunication technologies (ICT-proxied by mobile phone subscription and Internet usage) on carbon dioxide (CO2) emissions in the Organization for Economic Cooperation and Development (OECD) countries from 1990 to 2018.Design/methodology/approachThe Cross-section Autoregressive Distributed Lag (CS-ARDL) model is employed to address the potential cross-section dependence problem. Common Correlated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators are used to test for robustness of results.FindingsResults reveal contrasting effects of mobile phone subscription and Internet usage on CO2 emissions. While mobile phone penetration helps mitigate CO2 emissions, Internet usage tends to increase the emissions. Findings show that renewable energy is beneficial to the environment while economic growth is harmful to the environment. The effects of financial development and trade openness seem negligible.Practical implicationsThis study offers practical implications for policymakers. As different proxies of ICT could have contradictory impact on CO2, governments should be cautious against utilizing ICT to mitigate CO2. Findings point to the benefits of renewable energy in alleviating CO2 emissions. Therefore, governments are strongly advised to implement policies facilitating renewable energy consumption.Originality/valuePrevious studies ignored the problem of cross-section dependence which could lead to biased results and cause misleading inferences. This study aims to fill this void in the literature.

Trilemma association of natural resources, technology and innovation's applications in regional growth

The relationship between natural resources and environmental damage significantly affects the ecosystem, and technological advancements are essential to managing these issues. However, funding unfavourable environmental initiatives financially has prompted several concerns about establishing a clear connection between the environment and financial market items. The relationship between natural resources, technology and innovation for sustainable development in China from 2000 to 2021 is examined in this study. In order to investigate the highlighted link, the research makes use of a variety of econometric tools, including the Augmented Mean Group, Common Correlated Effects Mean Group and Driscoll‐Kraay estimators. The cointegration findings based on Westerlund J. (2007) demonstrate that the study's specified variables have a long‐run equilibrium connection across the examined time. According to empirical research, environmental deterioration is caused by technology, natural resources, foreign direct investment and total reserves, whereas technical innovation and renewable energy lower CO2 emissions. Additionally, the connection between technical innovation and industrial value‐added has a detrimental effect on the ecology in the Chinese provinces. Based on these findings, China's provinces are urged to promote green technology development while maintaining the bloc's high environmental protection standards. The closing portion has various critical policy implications for safeguarding environmental quality in China.

Do natural resources and green technological innovation matter in addressing environmental degradation? Evidence from panel models robust to cross-sectional dependence and slope heterogeneity

This study investigates the impact of natural resources and green technological innovation on environmental degradation via carbon dioxide emissions within the framework of environmental Kuznets curve (EKC) with renewable energy consumption and urbanization as control variables. Current econometric techniques are engaged for accuracy and reliability, and the study panel is revealed to be heterogeneous and cross-sectionally based, with yearly data from Asian countries from 1990 to 2019. The Augmented Mean Group (AMG) and Dynamic Common Correlated Effects Mean Group (DCCEMG) estimators are employed to examine the connection between the variables, and the findings affirm that increasing green technological innovation and renewable energy consumption mitigate environmental degradation, while urbanization exacerbates it. Natural resources are found to have both increasing and decreasing impacts on environmental degradation. The EKC hypothesis is validated in Asia, indicating that environmental degradation rises with economic expansion until it peaks, then declines, forming an inverted U-shaped curve. The study established bi-directional causalities between economic growth and environmental degradation, natural resources and environmental degradation, renewable energy consumption and environmental degradation, and urbanization and environmental degradation. Nevertheless, uni-directional causality from green technological innovation to environmental degradation is affirmed. Therefore, it is recommended that Asian countries prioritize policies that promote the development and implementation of green technologies, such as hybrid vehicles, energy-efficient building systems, and smart grids, among others, to enable sustainable energy consumption. This will reduce resource consumption, waste production, and pollution while achieving significant cost savings.

Formulating energy security strategies for a sustainable environment: Evidence from the newly industrialized economies

This study investigates the role of energy security on environmental assessment using empirical dataset from the Newly Industrialized Countries. Along with energy security, several important non-climatic indicators such as quality of governance, financial development and uncertainty index are incorporated into the carbon emissions function. This study uses efficient panel data techniques such as Dynamic Common Correlated Effects Estimator-Mean Group and Common Correlated Effects Mean-Group estimation approaches. These techniques take into account the problems of cross-section related dependence and slope-heterogeneity. The findings from current study demonstrate that energy insecurity drives emissions while technological innovations, natural resources and financial development negatively affect environmental quality. Moreover, having uncertainty in the economy also drives emissions. Emerging economies must implement environmental plans that amalgamate economic decisions and environmental concerns. Another thrust of emphasis is on the need to encourage the pricing of environmental resources to influence environmental sustainability. To promote energy security and environmental welfare, there is an urgent need to discuss the roles of energy savings and abolishing subsidies on fossil fuels.

The roles of renewable energy, globalization, population expansion and deliberative democracy on Sustainable Development in South Asia.

South Asian region is extremely vulnerable to climate change which hampers its attainment of the sustainable development goals (SDGs). This study explores how sustainable development of South Asian nations is affected by the clean or renewable energy consumption, globalization, population growth and deliberative democracy. To tackle the effects of shocks within the cross-sectional units as well as to account for endogeneity, this study utilizes Common Correlated Effects Mean Group-Generalized Method of Moments (CCE-GMM) estimation technique proposed by Neal (2015). Common Correlated Effects Mean Group (CCE-MG) of Pesaran 2006 and Augmented Mean Group (AMG) by Eberhardt and Teal (2010) and Eberhardt and Bond (2009) techniques are also utilized as robustness checks. The empirical results reveal that the consumption of renewable or clean energy can significantly and positively affect sustainable development, implying that deploying clean energy technologies is helpful to achieve SDG agenda in South Asia. Population growth is found to be hampering sustainable development while deliberative democracy ensures this development. The impact of globalization on sustainable development was found to be negative yet insignificant. Bidirectional causal relationship was discovered between sustainable development and renewable energy, between population and sustainable development, between deliberative democracy and sustainable development and between deliberative democracy and globalization. Finally, the study provides policy directions to achieve sustainable development in South Asia via enhanced integration of renewable energy in the region's energy mix.

Drivers of food security in West Africa: Insight from heterogeneous panel data analysis on income-level classification.

This paper investigates the factors driving food security in West African countries. Specifically, it examines the impact of natural resource rents, institutional quality, and climate change on food security while controlling for industrialization and economic growth. Our research is motivated by the urgent need for swift policy action to address the escalating food crisis in the region and prevent any potential catastrophic consequences. Second-generation econometric techniques are utilized for accurate and reliable outcomes based on yearly datasets from West African countries from 2000 to 2020, and the countries are sub-grouped into low-income and lower-middle-income. The findings unveil the panel as heterogeneous and cross-sectionally based, and all the study variables are first differenced stationary and co-integrated in the long run. Hence, the Augmented Mean Group and Common Correlated Effects Mean Group estimators are utilized to explore the relationships between the variables, and the findings reveal that natural resource rents, climate change, and industrialization are detrimental to food security across the sub-groups. However, the outcomes affirm institutional quality and economic growth as beneficial drivers of food security across the sub-groups. Therefore, this study recommends that authorities of both low-income and lower-middle-income countries make substantial investments in sustainable natural resource utilization and also work towards enhancing the efficiency and effectiveness of their institutions, as well as investing in environmental research to explore climate change mitigation possibilities that could enhance food security in West Africa.

Neutralizing the surging emissions amidst natural resource dependence, eco-innovation, and green energy in G7 countries: Insights for global environmental sustainability

The unrelenting surge in global warming in the current era suggests the inevitable need for governments across the globe to embark on policy measures that will help flatten the curve of the surging emissions. Consequently, the concept of carbon neutrality has become a vital policy approach for countries to achieve sustainable development. The present study extends the debates on carbon neutrality by examining the extent to which prominent factors such as natural resource dependence, eco-innovation, and green energy (biofuel and renewable energy) facilitate or hinder strides toward achieving carbon neutral environment in G7 economies. The study considers the additional roles of carbon tax, environmental policy stringency, and financial development in longitudinal data ranging from 1997 to 2019. The verification of the stated hypotheses hinges on a battery of estimators comprising cross-sectional ARDL, common correlated effects mean group, augmented mean group, and panel quantile regression. The empirical findings show that green energy, carbon tax, and environmental policy support the drive towards carbon neutrality by reducing the stock of CO2 emissions. On the other hand, natural resource dependence and financial development hinder the carbon neutrality agenda by escalating the surge in CO2 emissions. Robustness analyses are conducted from the angle of an additional outcome variable and estimation technique of which the results corroborate the empirical regularity of the main findings. Policy implications are derived from the empirical findings.

Revisiting the impact of trade openness on environmental sustainability in Belt and Road countries: a heterogeneous panel approach.

The nations participating in the Belt and Road Initiative (BRI) are particularly vulnerable to the challenges posed by climate change due to their extensive trading activities. The need to protect the environment and mitigate the adverse impacts of climate change in these countries is of utmost importance. Therefore, this study contributes to the scientific understanding of this issue by examining the relationship between trade openness and environmental sustainability in 89 BRI countries from 1990 to 2020. Additionally, control variables, including economic growth, energy consumption, urbanization, industrialization, and foreign direct investment, are considered to address omitted variable bias issues. The study utilizes the Augmented Mean Group (AMG) and Common Correlated Effects Mean Group (CCEMG) regression estimators, and the findings reveal that trade openness improves environmental sustainability. However, economic growth, energy consumption, urbanization, and industrialization degrade environmental sustainability. Interestingly, the results affirm foreign direct investment as a trivial determinant of environmental sustainability. Regarding causal relationships, reciprocal causalities are observed between trade openness and carbon emissions, energy consumption and carbon emissions, and urbanization and carbon emissions. Furthermore, one-way causalities exist from economic growth to carbon emissions and from carbon emissions to foreign direct investment. Nevertheless, no causal relationship is identified between industrialization and carbon emissions. Based on these significant findings, it is recommended that China, as a prominent player in the BRI, takes further steps to enhance and promote energy-efficient practices in BRI countries. One practical approach is the establishment of energy efficiency standards for the goods and services traded with these countries.