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- Title
The dirty energy dilemma via financial development and economic globalization in Pakistan: new evidence from asymmetric dynamic effects.
- Authors
Tariq, Muhammad; Xu, Yingzhi; Muhammad, Faqeer; Alam, Khalid Mehmood
- Abstract
Energy strategy has been an essential strand in the view of economists in achieving rapid development process of any country. The recent wave of globalization exerts pressure on energy consumption via financial development which ultimately vindicates economic growth. This paper has covered a period of 1976–2016 using annual data for the empirical analysis and constructed a growth equation as the main equation and the energy consumption equation as a channel equation. The empirical study has been undertaken by performing ARDL and nonlinear autoregressive distributed lag models (NARDL). The bound test result declares a long-run association in both equations. Consequently, energy consumption and economic globalization have significantly enhanced economic growth in the long run. Whereas, financial development index has no influence on the economic growth of Pakistan. The results of channel equation suggested that due to growing the price of crude oil, the energy consumption is reduced in the long run. The increasing imports of energy products and increasing urbanization are conducive for energy consumption in Pakistan. By NARDL model, our empirical findings provide robust support for the existence of asymmetric co-integration linking among underlying variables of the study.
- Subjects
PAKISTAN; GLOBALIZATION &; economic development; VECTOR error-correction models; AUTOREGRESSIVE models; ENERGY consumption; ECONOMIC globalization; PETROLEUM sales &; prices; DILEMMA
- Publication
Environmental Science & Pollution Research, 2019, Vol 26, Issue 25, p25500
- ISSN
0944-1344
- Publication type
Article
- DOI
10.1007/s11356-019-05752-4