Munich Personal RePEc Archive

The effects of financial development, economic growth, coal consumption and trade openness on environment performance in South Africa

Muhammad, Shahbaz and Tiwari, Aviral and Muhammad, Nasir (2011): The effects of financial development, economic growth, coal consumption and trade openness on environment performance in South Africa.

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Abstract

This paper explores the effects of financial development, economic growth, coal consumption and trade openness on environmental performance using annual data over the period of 1965-2008 for South African economy. ARDL bounds testing approach to cointegration has used to test the long run relationship among the variables while short run dynamics have been investigated by applying error correction method (ECM). Unit root problem is checked through Saikkonen and Lutkepohl [1] structural break unit root test.

Our findings confirmed long run relationship among the variables. Results showed that a rise in economic growth increases energy emissions while financial development lowers it. Coal consumption has significant contribution to deteriorate environment significantly. Trade openness improves environmental quality by lowering the growth of energy pollutants. EKC is also existed.

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