TY - JOUR
T1 - Environmental sustainability and financial development in Africa; does institutional quality play any role?
AU - Ntow-Gyamfi, Matthew
AU - Bokpin, Godfred A.
AU - Aboagye, Anthony Q.Q.
AU - Ackah, Charles Godfred
N1 - Publisher Copyright:
© 2020 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
PY - 2020/1/1
Y1 - 2020/1/1
N2 - The Environmental Kuznets Curve (EKC) having been used to explain the relationship between growth and environmental degradation has gained some attention in the finance literature in recent times. In this study, we re-conceptualize the EKC into a Financial Market Environmental Kuznets Curve (FMECK) that explains the relationship between financial development and sustainability, while introducing institutional quality as a moderator. The study posits that there is an Environmental Kuznets Curve for Africa and that the EKC holds for financial development and sustainability. Institutional Quality and Regulatory framework moderate the finance–sustainability nexus, which leads to the conceptualization of FMEKC. We find an inverted ‘U’ relationship between financial development and environmental degradation, which we explain using three arguments. We document that having a robust institutional framework in place could reduce the long-run adverse effects of financial development on the environment.
AB - The Environmental Kuznets Curve (EKC) having been used to explain the relationship between growth and environmental degradation has gained some attention in the finance literature in recent times. In this study, we re-conceptualize the EKC into a Financial Market Environmental Kuznets Curve (FMECK) that explains the relationship between financial development and sustainability, while introducing institutional quality as a moderator. The study posits that there is an Environmental Kuznets Curve for Africa and that the EKC holds for financial development and sustainability. Institutional Quality and Regulatory framework moderate the finance–sustainability nexus, which leads to the conceptualization of FMEKC. We find an inverted ‘U’ relationship between financial development and environmental degradation, which we explain using three arguments. We document that having a robust institutional framework in place could reduce the long-run adverse effects of financial development on the environment.
KW - Africa
KW - EKC
KW - environmental sustainability
KW - financial development
KW - institutional quality
UR - http://www.scopus.com/inward/record.url?scp=85088512630&partnerID=8YFLogxK
U2 - 10.1080/21665095.2020.1798261
DO - 10.1080/21665095.2020.1798261
M3 - Article
AN - SCOPUS:85088512630
SN - 2166-5095
VL - 7
SP - 93
EP - 118
JO - Development Studies Research
JF - Development Studies Research
IS - 1
ER -