Nexus Between Financial Development,economic Growth,Energy Consumption,and Environmental Quality

The concept of modernization and globalization urges a tendency of bilateral cooperation and strategical relationships among the nations.At the same illustration,China has been grabbed the Belt and Road Initiative(BRI)in 2013,to articulate the slogan of "Going global strategy." Diverse impact of greenhouse gasses(GHGs)over the landscape of environment,is generally believed in literature.As CO2 emission acutely leads to GHGs is a major contributor to global warming,it creates severe pressure on natural resources and ecological settings.Similarly,low carbon(CO2)economy,plenty of energy resources and sustainable growth,are a big ask for worldwide economies in this era of mechanization.Accordingly,there is an emerging body of literature that recognizes the importance of “EEE” economy,energy and environment in a country or a group of countries.Thus,the “EEE” concept become a hot topic among BRI selected economies and provoke a debate that how to frame an equilibrium in(EEE),for achieving the sustainable development and mitigating energy and environmental related impending challenges and harvesting the opportunities for a single country or cluster of countries' for the accomplishment of Belt a and Road Initiative(BRI)successfully.The debate breeds four understandings through the world changing project(BRI),one of which directs for economic sustainability,second for sustainability in energy consumption,third for effectual financial development,and fourth and final dominates for environmental quality and its sustainability challenges and prospects for Belt and Road Initiative economies.The query about “EEE” sustainability turn up at this point that whether and to what extent financial development,economic growth,and energy consumption has impacted on environmental quality in BRI participated economies?This thesis aims to investigate the interrelationships between financial development,gross fixed capital formation,energy consumption,industrial development,urbanization,trade openness,economic growth and environmental quality for Belt and Road Initiative economies with the aid of some others vital macro-level economic indicators over the period of 1981 to 2016.Furthermore,it also discovers such nexus with the aid of full sample of BRI 65 economies and their subdivision based on income level and continent regional sub-samples with few more variables and explains this imperative bond,considering impending challenges and implications for such BRI countries.Dynamic panel estimations(dynamic ordinary least square(DOLS)and fully modified ordinary least square(FMOLS))were engaged to examine the long-run links between the subjected variables.The panel estimations are employed to investigate the long run ties among the variables,and the full panel results unveiled that energy consumption,high-tech industry,and economic growth unfavorably dented to the environmental quality,but financial development and renewable energy consumption have a favorable effect for it.The energy consumption is positive and significantly impacting to the environmental quality for all regions except the South Asian region.This scenario postulates that carbon emissions in the environment highly provoked by electricity consumption in the fore stated regions.The overall outcomes postulate a weak association of economic indicators with carbon emissions in the long run except for Europe,MENA,and Southeast Asian regions.Secondly,this paper also analyzes the Environmental Kuznets Curve(EKC)hypothesis,for Belt and Road Initiative(BRI)economies,to contend the role of mega projects in BRI as an attribute for ecological detriments.The calculated outcomes expose that Mean Group estimator provides strong evidence and favor the existence of EKC approximately in every region.Moreover,the long-run influence is measured by Pooled Mean Group estimators,which shows significance outcomes in every region;additionally,the EKC hypothesis affirmed in the long run especially for developed European economies.Thirdly,synchronized outcomes from the panel of 47 economies show that energy consumption,gross fixed capital formation,economic growth,financial development,and urbanization unfavorably led to environmental degradation(CO2 emissions).However,trade openness is negatively correlated with emissions.Furthermore,pairwise panel Granger causative estimations justified bi-directional links from all regressors towards CO2 emissions,except for trade openness,which had unidirectional ties with environmental quality.In crosscountry,long-run assessments,different results were found,with CO2 emissions being significantly increased by economic growth in all countries and energy consumption in 30 countries;other predictors testified to some mixed interactions with CO2 emissions in the country-level examination.The fourth objective of the study is,empirically assesses the long run and short run tie of industrial revolution and energy consumption with CO2 emission over the period of 1971 to 2016 for China as a case of BRI initiator.The study is consistent with its outcomes and applying an ARDL bound test approach,and the study reveals that there is a positive and significant long-run linkage between industrial growth,services sector output and energy consumption with CO2 emission,however economic development negatively impacted to the CO2 emissions.The fifth and final aim of this current thesis is to elucidate the stock market dependence over macroeconomic variables freshly for Belt and Road Initiative(BRI)65 countries,by employing dynamic panel modeling techniques from 1981 to 2016.Our study is the broadest in terms of coverage and period,since,it is intended to peruse all stakeholder of(BRI)to get enormous benefit jointly.By using linear regression and dynamic models(GMM),the study finds a significant relationship with major economic indicators those postulates that stock market capitalization significant responses in versatile income level economies.The study finds explicitly that high-income countries of BRI get more benefit contrast to low-income economies;interest rate and inflation rate shows a robust and significant relationship with stock market development.Furthermore,the long run nexus analyzed by FMOLS and DOLS postulated that there are a long run and significant nexus enumerated between the interest rate and inflation corresponding to stock market capitalization.This research exploration has various policy implications for BRI full,income-wise,continent regional panels and the Chinese economy.On the foundation of our outcomes;The on-hand study is a guidance gadget for experts,policymakers,and BRI listed governments that they should be advised to the general masses and industries,converge towards renewable energy rather than fossil fuels energy sources,and embedded the water treatment plants near to industrial zones.Moreover,it has some important policy implications for environment monitoring organizations and portfolio investors,to arrange awareness campaigns for green investments,renewable energy dependency and others energy-related issues more anticipatory,thus far to accomplish visionary BRI feat.Furthermore,the policy implications are available not only for China but also for BRI nations,to cater the environmental issues by making strict policies for industries and focus should be on renewable energy sources that can help to condense the level of CO2 emissions.Finally,the outcomes from this study would be an accommodating source to the different listed and prospective candidate countries of BRI,which may get massive advantage form this worldchanging project in term of stock market integration and development.