Testing Environmental Kuznets Curve in the USA: What Role Institutional Quality, Globalization, Energy Consumption, Financial Development, and Remittances can Play? New Evidence From Dynamic ARDL Simulations Approach

This study intends to examine the validity of the Environmental Kuznets Curve (EKC) in the United States of America (USA), considering the vital role of macroeconomic variables, such as economic growth, institutional quality, globalization, energy consumption, financial development, urbanization, an...

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Bibliographic Details
Published in:Frontiers in environmental science 2021-12, Vol.9
Main Authors: Khan, Muhammad Imran, Kamran Khan, Muhammad, Dagar, Vishal, Oryani, Bahareh, Akbar, Syeda Saba, Salem, Sultan, Dildar, Sayyad Mahejabin
Format: Article
Language:English
Subjects:
economic growth
financial development
globalization
institutional quality
remittances inflow
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Summary:This study intends to examine the validity of the Environmental Kuznets Curve (EKC) in the United States of America (USA), considering the vital role of macroeconomic variables, such as economic growth, institutional quality, globalization, energy consumption, financial development, urbanization, and remittance from 1985 to 2020. The impact of positive/negative shock in a regressor on CO 2 emissions keeps other regressors unchanged and has been investigated using the novel dynamic stimulated autoregressive distributed lag (ARDL) model. The empirical findings revealed the positive impact of economic growth and negative impact of the square economic growth on environmental degradation in the short- and long term. It indicates the validity of the EKC hypothesis in the case of the USA. Moreover, financial development, energy consumption, globalization, remittances inflow, and urbanization reduce the environmental quality. On the contrary, institutional quality improves the environmental quality by reducing CO 2 emissions. The appropriate recommendations to design the inclusive economic-environment national energy policy were proposed.
ISSN:2296-665X
2296-665X
DOI:10.3389/fenvs.2021.789715