The effects of stock market growth and renewable energy use on CO2 emissions: Evidence from G20 countries

Paramati, S, Mo, D and Gupta, R 2017, 'The effects of stock market growth and renewable energy use on CO2 emissions: Evidence from G20 countries', Energy Economics, vol. 66, pp. 360-371.


Document type: Journal Article
Collection: Journal Articles

Title The effects of stock market growth and renewable energy use on CO2 emissions: Evidence from G20 countries
Author(s) Paramati, S
Mo, D
Gupta, R
Year 2017
Journal name Energy Economics
Volume number 66
Start page 360
End page 371
Total pages 12
Publisher Elsevier
Abstract The primary objective of this study is to empiricallyexamine the effect of stock market growth and foreign direct investment (FDI) inflows on CO2 emissions. Further, this study investigates the impact of renewable energy consumption on CO2 emissions and economic output in a panel of the G20 countries. The empirical analysis was carried out on the full sample as well as on sub-samples of developed and developing economies of the G20 member countries. The results confirm a significant long-run equilibrium relationship among the variables across the panels. Further, the long-run elasticities suggest that FDI significantly reduces CO2 emissions in the full sample and developing economies while stock market growth reduces in developed economies. Similarly, the renewable energy consumption substantially reduces CO2 emissions and increases economic output across the panels. Our findings have important policy implications. For instance, the policy makers have to initiate effective policies to promote the renewable energy sources to meet the increasing demand for energy by replacing the use of conventional energy such as coal, gas and oil. This will therefore help to reduce the CO2 emissions and also ensure sustainable economic development in the G20 nations.
Subject Environment and Resource Economics
Keyword(s) CO emissions 2
FDI inflows
G20 nations
Renewable energy
Stock market growth
DOI - identifier 10.1016/j.eneco.2017.06.025
Copyright notice /© 2017 Elsevier B.V. All rights reserved.
ISSN 0140-9883
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