The role of stock markets on environmental degradation: A comparative study of developed and emerging market economies across the globe
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Affiliation
Jiangxi University of Finance and EconomicsUniversity of Dundee
Griffith University
University of Piraeus
Issue Date
2017-12-17
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It is well established in the literature that stock markets increase both economic activities and energy consumption across countries. Therefore, it is commonly believed that stock markets are expected to have a significant effect on CO2 emissions. However, it is not known whether these stock markets can contribute to more or less CO2 emissions. Hence, the goal of this study is to examine the impact of stock market indicators on CO2 emissions across a global panel of both developed and emerging market economies. The results establish that stock market indicators have a significant negative and positive impact on carbon emissions in developed and emerging market economies, respectively. Furthermore, the findings illustrate the presence of the Environmental Kuznets Curve (EKC) hypothesis, implying that stronger stock markets lead to a further decline in carbon emissions. Given these findings, the study argues that the role of stock markets in the abatement of CO2 emissions significantly varies across both developed and emerging market economies. Significant implications have to do with the fact that developed markets might have initiated effective policies on listed firms to minimize carbon emissions, while emerging markets are yet to achieve this.Citation
Paramati, S.R., Alam, M.S., and Apergis, N. (2017) ‘The role of stock markets on environmental degradation: a comparative study of developed and emerging market economies across the globe’, Emerging Markets Review, 35, pp. 19-30. doi: 10.1016/j.ememar.2017.12.004Publisher
ElsevierJournal
Emerging Markets ReviewDOI
10.1016/j.ememar.2017.12.004Type
ArticleLanguage
enISSN
1566-0141ae974a485f413a2113503eed53cd6c53
10.1016/j.ememar.2017.12.004
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Except where otherwise noted, this item's license is described as http://creativecommons.org/licenses/by-nc-nd/4.0/