Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches

Fiscal policy is a crucial government tool for influencing and managing the national economy and creating a strong incentive for low carbon investment. Previous literature has reputable evidence that improving fiscal policy enhances environmental quality. However, the literature fails to classify th...

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Autores principales:	Mustafa Kamal, Muhammad Usman, Atif Jahanger, Daniel Balsalobre-Lorente
Formato:	article
Lenguaje:	EN
Publicado:	MDPI AG 2021
Materias:	CO<sub>2</sub> emission globalization fiscal policy pollution haven hypothesis panel threshold model Technology T
Acceso en línea:	https://doaj.org/article/31236ea115d34e788eaa05ae2e55565a
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spelling	oai:doaj.org-article:31236ea115d34e788eaa05ae2e55565a2021-11-11T15:47:24ZRevisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches10.3390/en142169681996-1073https://doaj.org/article/31236ea115d34e788eaa05ae2e55565a2021-10-01T00:00:00Zhttps://www.mdpi.com/1996-1073/14/21/6968https://doaj.org/toc/1996-1073Fiscal policy is a crucial government tool for influencing and managing the national economy and creating a strong incentive for low carbon investment. Previous literature has reputable evidence that improving fiscal policy enhances environmental quality. However, the literature fails to classify the exact turning level (threshold point) below/above which the association may be negative or positive. In this regard, this research investigates the nexus between fiscal policy, foreign direct investment, financial development, trade openness, urban population, gross capital formation, labour force, and CO<sub>2</sub> emissions in the era of globalization. The panel data set contained 105 countries over the period from 1990 to 2016. The empirical findings are estimated through linear and nonlinear panel data approaches such as fully modified ordinary least square and panel threshold regression. The subsequent findings are established: first, fiscal policy and globalization significantly increase environmental pollution. Second, the empirical results confirm the existence of the pollution haven hypothesis (PHV). Third, financial development and gross fixed capital formation are also considered some of the most crucial indicators to increase pollution levels. Fourth, trade openness, urban population, and labour force improve environmental quality. Fifth, panel threshold regression discovers that countries maintain a minimum level of fiscal policy at −1.2889. Based on these empirical findings, this study suggests that policymakers and governments of these countries should take steps to restructure their industrial sector and design macroeconomic-level carbon-free policies to support the implementation of low-energy-intensive and lower carbon production technologies.Mustafa KamalMuhammad UsmanAtif JahangerDaniel Balsalobre-LorenteMDPI AGarticleCO<sub>2</sub> emissionglobalizationfiscal policypollution haven hypothesispanel threshold modelTechnologyTENEnergies, Vol 14, Iss 6968, p 6968 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	CO<sub>2</sub> emission globalization fiscal policy pollution haven hypothesis panel threshold model Technology T
spellingShingle	CO<sub>2</sub> emission globalization fiscal policy pollution haven hypothesis panel threshold model Technology T Mustafa Kamal Muhammad Usman Atif Jahanger Daniel Balsalobre-Lorente Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
description	Fiscal policy is a crucial government tool for influencing and managing the national economy and creating a strong incentive for low carbon investment. Previous literature has reputable evidence that improving fiscal policy enhances environmental quality. However, the literature fails to classify the exact turning level (threshold point) below/above which the association may be negative or positive. In this regard, this research investigates the nexus between fiscal policy, foreign direct investment, financial development, trade openness, urban population, gross capital formation, labour force, and CO<sub>2</sub> emissions in the era of globalization. The panel data set contained 105 countries over the period from 1990 to 2016. The empirical findings are estimated through linear and nonlinear panel data approaches such as fully modified ordinary least square and panel threshold regression. The subsequent findings are established: first, fiscal policy and globalization significantly increase environmental pollution. Second, the empirical results confirm the existence of the pollution haven hypothesis (PHV). Third, financial development and gross fixed capital formation are also considered some of the most crucial indicators to increase pollution levels. Fourth, trade openness, urban population, and labour force improve environmental quality. Fifth, panel threshold regression discovers that countries maintain a minimum level of fiscal policy at −1.2889. Based on these empirical findings, this study suggests that policymakers and governments of these countries should take steps to restructure their industrial sector and design macroeconomic-level carbon-free policies to support the implementation of low-energy-intensive and lower carbon production technologies.
format	article
author	Mustafa Kamal Muhammad Usman Atif Jahanger Daniel Balsalobre-Lorente
author_facet	Mustafa Kamal Muhammad Usman Atif Jahanger Daniel Balsalobre-Lorente
author_sort	Mustafa Kamal
title	Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
title_short	Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
title_full	Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
title_fullStr	Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
title_full_unstemmed	Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches
title_sort	revisiting the role of fiscal policy, financial development, and foreign direct investment in reducing environmental pollution during globalization mode: evidence from linear and nonlinear panel data approaches
publisher	MDPI AG
publishDate	2021
url	https://doaj.org/article/31236ea115d34e788eaa05ae2e55565a
work_keys_str_mv	AT mustafakamal revisitingtheroleoffiscalpolicyfinancialdevelopmentandforeigndirectinvestmentinreducingenvironmentalpollutionduringglobalizationmodeevidencefromlinearandnonlinearpaneldataapproaches AT muhammadusman revisitingtheroleoffiscalpolicyfinancialdevelopmentandforeigndirectinvestmentinreducingenvironmentalpollutionduringglobalizationmodeevidencefromlinearandnonlinearpaneldataapproaches AT atifjahanger revisitingtheroleoffiscalpolicyfinancialdevelopmentandforeigndirectinvestmentinreducingenvironmentalpollutionduringglobalizationmodeevidencefromlinearandnonlinearpaneldataapproaches AT danielbalsalobrelorente revisitingtheroleoffiscalpolicyfinancialdevelopmentandforeigndirectinvestmentinreducingenvironmentalpollutionduringglobalizationmodeevidencefromlinearandnonlinearpaneldataapproaches
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Revisiting the Role of Fiscal Policy, Financial Development, and Foreign Direct Investment in Reducing Environmental Pollution during Globalization Mode: Evidence from Linear and Nonlinear Panel Data Approaches

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