Journal
SUSTAINABILITY
Volume 12, Issue 17, Pages -Publisher
MDPI
DOI: 10.3390/su12176959
Keywords
carbon emission; financial development; time series autoregressive distributed lag model; panel autoregressive distributed lag model; China
Funding
- Independent Innovation Fund of Tianjin University [2020XSC-0075]
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This paper studies the impact of financial development on carbon emissions in China from 1997 to 2016. First, this paper uses the entropy method to construct a synthetical index to measure the financial development. Meanwhile, a two-dimensional panel framework is introduced to group provinces in the panel analysis. The estimation results of the time series autoregressive distributed lag model show that for China as a whole, there is a weak carbon emissions reduction effect of financial development, whether it is a long-term effect or a short-term effect. The estimation results of the panel autoregressive distributed lag model also support that an increase in financial development suppresses carbon emissions. Although financial development inhibits carbon emissions both in the short run and in the long run, the absolute value of the long-term coefficient of financial development is significantly greater than that of the short-term coefficient.
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