Munich Personal RePEc Archive

Asymmetric Effects of Renewable Energy Consumption, Trade Openness and Economic Growth on Environmental Quality in Nigeria and South Africa

Iorember, Paul Terhemba and Usman, Ojonugwa and Jelilov, Gylych (2019): Asymmetric Effects of Renewable Energy Consumption, Trade Openness and Economic Growth on Environmental Quality in Nigeria and South Africa.

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Abstract

The study investigates the asymmetric effects of renewable energy consumption (REC), trade openness (TOP) and GDP per capita (GDP) on environmental quality in Nigeria and South Africa using the Non-linear Autoregressive Distributed Lag (NARDL) model from 1990Q1-2014Q4. To ensure this, the Zivot-Andrews unit root test and nonlinear ARDL cointegration tests are employed. The empirical results based on the NARDL found that REC, TOP and GDP have asymmetric effects on environmental quality in Nigeria and South Africa in the long-run and the short-run dynamics. Specifically, the long-run effect of a negative change in REC and GDP is stronger than that of a positive change of the same magnitude. Similarly, the effect of a positive change in TOP is stronger than the negative change. The results of the short run for Nigeria indicates that the effect of a negative change in REC and GDP is stronger than that of the positive change, while the effect of a positive change in TOP is stronger than its negative change. For South Africa, the positive change in REC and GDP is stronger than the negative change while for TOP the negative change is stronger than the positive change. The policy implications of the findings are carefully discussed in the text.

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