The impact of stock market development and energy consumption on environmental quality in emerging economies

Document Type : Original Article

Authors

1 Esteghlal Building, Yazd University Main Campus , Pajoohesh Bulevard , Safaeye, Yazd, Iran

2 University of Isfahan, Isfahan, Iran

3 Isfahan university, Isfahan, Iran

4 Shahid Chamran, Ahvaz, Iran

10.22080/jeem.2024.26910.1006

Abstract

Human activities have affected all parts of the environment and have aggravated social and environmental crises in the contemporary period. Countries are promoting economic growth and improving living standards, which leads to an increase in the use of fossil fuels in industrialization and activities related to promoting economic growth, and as a result, reduces the quality of the environment. The purpose of this research is to investigate the impact of stock market development and energy consumption on environmental quality in emerging economies for the time period of 2002-2022 and using the generalized moments method. The results of the research show that the stock market development variable has a positive and significant effect on carbon dioxide emissions. When the stock market develops, there are more resources to finance production, which increases greenhouse gas emissions by increasing energy consumption. In addition, energy consumption has a positive and significant effect on carbon dioxide emissions. The positive reaction of energy consumption to the emission of carbon dioxide can lead to global warming and climate change due to excessive use of fossil energy sources. Also, the variables of urbanization, economic growth and the first lag of the dependent variable have a positive and significant effect on carbon dioxide emissions. While, the government size variable has a negative and significant effect on carbon dioxide emissions. According to the results, in emerging economies to reduce the carbon of industrial companies, policymakers should implement strict environmental policies without affecting the development of financial markets.

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Journal of Energy Economics Modeling
Volume 1, Issue 1
September 2023

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