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Heterogeneous effects of remittances and institutional quality in reducing environmental deficit in the presence of EKC hypothesis: A global study with the application of panel quantile regression.

Authors
  • Usman, Muhammad1
  • Jahanger, Atif2
  • 1 Department of Economics, Government College University Faisalabad, Faisalabad, 38000, Pakistan. , (Pakistan)
  • 2 School of Economics, Zhongnan University of Economics and Law, Wuhan, 430073, China. [email protected] , (China)
Type
Published Article
Journal
Environmental Science and Pollution Research
Publisher
Springer-Verlag
Publication Date
Jul 01, 2021
Volume
28
Issue
28
Pages
37292–37310
Identifiers
DOI: 10.1007/s11356-021-13216-x
PMID: 33713269
Source
Medline
Keywords
Language
English
License
Unknown

Abstract

This study investigates the heterogeneous effects of remittance inflows, institutional quality, foreign direct investment, energy consumption, financial development, and trade openness on the ecological footprint spanning from 1990 to 2016 for the global panel of 93 countries. The current study employs a panel quantile regression (PQR) approach for tickling the distributional and unobserved country-specific heterogeneity. The findings reveal that remittance inflows significantly enhanced the environmental degradation in 5th to 70th quantiles and it turns to becomes negative at 80th to 95th quantiles. Similarly, institutional quality also deteriorates the environmental quality in all quantiles except higher quantiles such as 90th and 95th quantiles, which shows the improved environmental quality. Furthermore, the results support the validity of an inverted U-shaped environmental Kuznets curve (EKC) hypothesis. In addition, financial development, energy consumption, and trade openness significantly deteriorate the environmental quality in the long run. In contrast, foreign direct investment improves environmental sustainability. Moreover, these findings are robust to various robustness analyses which confirm the consistency of the results. Related policy proposals are then offered according to our empirical findings. © 2021. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.

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