Remittances Review

January, 2024
Volume: 9, No: 1, pp. 631-653
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Received: 16 November 2023, Accepted: 22 December 2023

DOI: https://doi.org/10.33182/rr.vx9il.58

EXAMINING THE ENVIRONMENTAL IMPLICATIONS OF FINANCIAL

DEVELOPMENT, FDI, AND TECHNOLOGICAL INNOVATION: INSIGHTS FROM
PAKISTAN
Mojawir Ahmad Sadat
Major: MBA, Email: [email protected]
Affiliation: China University of Geosciences, Wuhan.
Dr. Aftab Alam
Researcher in Department of Political Science at Abdul Wali Khan University Mardan, KP,
Pakistan, Email: [email protected]
Dr. Arfan Mahmood
Assistant Professor, Centre for South Asian Studies, University of the Punjab, Lahore. E-mail:
[email protected]
Iqra Jathol
Centre for south Asian studies, University of the Punjab Lahore
[email protected]
Abstract
One of the key solutions to achieving “sustainable development” in Pakistan is to narrow the divide
between economic activities and environmental quality. This study investigates the dynamic
influence of GDP, financial development, foreign direct investment, population density, renewable
energy consumption, and technological innovation on environmental degradation in Pakistan from
1990 to 2020. ADF and Phillips Perron unit root tests confirmed the stationarity of variables with
a mix of level and first difference. Moreover, the F-bounds test revealed the presence of
cointegration in the model. By using the ARDL approach, the long-term estimates highlight the
significant contribution of the aforementioned variables in shaping environmental outcomes. Key
insights include the negative impact of GDP per capita and financial development on
environmental degradation, emphasizing the importance of sustainable economic policies and
efficient resource allocation. Additionally, technological innovation positively influences
environmental degradation, underscoring the need for green innovation and clean technology
adoption. The study also reveals the positive linkage between population density and
environmental degradation, emphasizing the importance of sustainable urban planning. Lastly,
renewable energy consumption negatively affects environmental degradation, underscoring the
significance of transitioning to renewable energy sources. The error correction model showed the
presence of convergence, which confirmed short-run equilibrium. Granger causality showed
mixed unidirectional and bidirectional linkages of carbon emissions with each independent

631 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

variable. Based on these findings, policy recommendations include promoting sustainable

economic development, strengthening the financial sector's focus on eco-friendly investments,
fostering green innovation, implementing sustainable urban planning strategies, and encouraging
renewable energy adoption.
Keywords: Carbon Emission, Foreign direct investment, Financial Development, Renewable
Energy Consumption, ARDL Method.
1. Introduction
The primary focus of global economies is to achieve the Sustainable Development Goals (SDGs),
which have been a continuous priority for developing and emerging nations as they strive for rapid
economic progress. Emerging nations are actively embracing liberalization and globalization to
gain a competitive advantage in the global economy. They are actively seeking foreign direct
investment (FDI) to support their economic growth (Wako, 2021). Developed countries find
emerging and developing nations appealing due to their abundant and cost-effective raw materials
as well as low-cost labor. Developing nations attract highly polluting industries from advanced
economies due to the absence of strict environmental regulations. Companies relocate to
developing nations to evade stringent standards, driven by a desire to evade stringent standards
(Wang & Zhang, 2020). Consequently, host economies experience an influx of capital through
FDI. Research conducted over the past few decades has shown that FDI has a substantial impact
on employment opportunities, knowledge transfer, and improved managerial skills, ultimately
leading to an enhanced standard of living for a significant portion of the population in the region
(Malik et al., 2023; Pradhan et al., 2022). However, the expansion of economic activities in FDI-
hosting economies relies heavily on energy consumption and fuel combustion. This growth also
entails the conversion of agricultural and forest lands into new industrial sites, resulting in
ecological imbalances. In the context of sustainable development, there has been growing concern
about the relationship between gross domestic product (GDP) and environmental degradation
(Mohsin et al., 2023; Alharthi et al., 2022; Ahmad & Wu, 2022). Traditional economic growth
models have long regarded GDP as a vital measure of economic progress and societal well-being,
often neglecting the environmental consequences of such growth. Consumption and production
patterns driving the relentless pursuit of GDP expansion have resulted in unprecedented levels of
environmental degradation, including climate change, deforestation, pollution, and loss of
biodiversity (Wassie, 2020; Thornton & Herrero, 2010).
Consequently, these industrial units become significant sources of carbon emissions, contributing
to poor environmental quality (Huang et al., 2023; Yu-Ke et al., 2022; Zhang et al., 2022). In
recent years, there has been a growing body of literature that delves into the environmental and
economic implications of technological innovations. Scholars have acknowledged the substantial
impact of these innovations in enhancing productivity and stimulating economic growth (Chen et
al., 2023; Mohamed et al., 2022; Acheampong et al., 2022). One key area where technology has
shown promise is in mitigating environmental degradation. By embracing technological
advancements, we can achieve greater resource efficiency, harness renewable energy sources,
implement effective pollution control measures, manage waste more efficiently, and enhance
environmental monitoring (Ramzan et al., 2023; Malik et al., 2023; Saqib et al., 2023; Kunkel &
Matthess, 2020). Resource efficiency lies at the heart of sustainable development. Technological
632 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

innovations allow us to optimize the use of resources, reducing waste and maximizing their
productivity. Furthermore, the consumption of renewable energy sources not only aids in
diversifying the energy mix but also plays a crucial role in dropping greenhouse gas emissions and
addressing the influences of climate change (Sovacool et al., 2021; Elum & Momodu, 2017).
Additionally, the implementation of pollution control measures is vital for the preservation of our
environment. Through technological innovations, we can develop and deploy advanced systems
to monitor and control pollution levels, thereby minimizing the negative impacts on ecosystems,
human health, and overall environmental quality (Liu et al., 2022). Effective waste management
is another critical aspect where technology can make a significant difference (Prajapati et al.,
2021). Implementing advanced waste management practices reduces the amount of waste sent to
landfills, promotes recycling and circular economy initiatives, and minimizes the environmental
footprint associated with waste disposal (Maiurova et al., 2022; Romero, Hernández, & Romero,
2018). Furthermore, embracing sustainable technologies not only helps address immediate
environmental challenges but also contributes to building a more sustainable future (Silvestre &
Ţîrcă, 2019). By adopting and supporting these innovations, we can create a conducive
environment for economic growth while safeguarding our planet's resources and ecosystems.
In addition to economic factors, researchers have also directed their attention towards demographic
aspects and have discovered a substantial connection with environmental quality. Scholarly works
shed light on this relationship, highlighting the direct association between human activities and
escalating carbon emissions (Li & Ullah, 2022; Sarkodie et al., 2020). Demographic factors
primarily encompass population structure and population size. One specific demographic factor,
the density of the population, has gained increasing recognition in recent literature as a critical
element linked to carbon emissions. Studies conducted by Saleem et al. (2018), Ozcan and Ulucak
(2021), and Yue et al. (2020) support this acknowledgment. Taking the case of Pakistan as an
example, the population density, measured in terms of the number of people per square kilometer
of land, has witnessed an increase from 88 in 1975 to 290 in 2021 (World Bank, 2022). In 2021,
Pakistan documented per capita carbon emissions of 1.04 metric tons. This metric provides an
indication of the average amount of carbon emissions produced by each individual in the country.
Moreover, a number of researchers have put forth the argument that the correlation between
financial development and pollution implies that advancements in the financial sector can
contribute a crucial part in increasing environmental conditions by reducing emissions (Islam,
2022; Zakaria & Bibi, 2019). Conversely, Dogan and Turkekul (2016) have argued that there is
no significant association between financial development and environmental degradation.
Contrarily, several studies have revealed negative environmental impacts associated with
economic advancement (Wang et al., 2022; Assi et al., 2021). This conflicting relationship
necessitates a thorough examination in order to formulate effective financial policies aimed at
improving environmental quality in Pakistan.
The primary contribution of this study lies in the development of a comprehensive framework to
examine the intricate relationship between foreign direct investment, GDP, population density,
financial development, technological innovations, and carbon emissions in Pakistan. By analyzing
these key variables using the ARDL approach, the study aims to offer valuable insights into the
long-run and short-run dynamics that influence environmental sustainability amidst economic
633 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

growth and technological advancements. The findings from this research endeavor have the
potential to inform policymakers, investors, and stakeholders on the most effective strategies to
promote sustainable development and bridge the gap between economic activities and
environmental quality in Pakistan. Through this holistic approach, the study contributes to the
ongoing global efforts towards achieving a more sustainable future for the nation and beyond.
2. Theoretical Framework
The Environmental Kuznets Curve (EKC) provides a theoretical framework for examining the
correlation between a country's gross domestic product (GDP) and its impact on the environment
(Bilgili et al., 2023; Guo et al., 2022; Boubellouta & Kusch-Brandt, 2020; Nikensari et al., 2019).
According to the EKC, as a nation’s GDP per capita rises, environmental degradation initially
increases but eventually decreases, forming an inverted U-shaped curve. During the early stages
of economic development, industries prioritize production and profitability, often leading to higher
pollution levels and resource depletion.
However, as countries reach a certain income threshold, various factors come into play, leading to
a reduction in environmental degradation. Technological advancements play a crucial role by
facilitating the adoption of cleaner technologies and more efficient resource management
practices. Additionally, as environmental awareness and education grow among the population,
there is an increased demand for sustainable practices. Governments respond by implementing
stricter environmental regulations that compel industries to mitigate their environmental impact.
Moreover, economic restructuring occurs, shifting away from pollution-intensive industries
towards cleaner sectors such as services and knowledge-based industries, further contributing to
environmental improvement. Figure 1 shows how GDP improves environmental quality by
reducing carbon emissions.
Figure 1. Theoretical Linkage between GDP and Carbon Emissions

GDP Growth

Economic Activities

Technological Innovations

Efficiency and Clean Technology

Environmental Regulations

Carbon Emission Reduction

Although the EKC offers valuable insights into the potential relationship between GDP and
environmental degradation, it's important to acknowledge that the shape of the curve and the
income threshold can vary among countries (Uche et al., 2023; Jahanger et al., 2023). Moreover,

634 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

certain environmental challenges, like climate change, may not conform to the simple EKC pattern
and require more comprehensive solutions.
Furthermore, literature has evidenced for significant linkage between FDI and carbon emission
through analyzing the Pollution Heaven and Pollution Halo Hypothesis (Ahmad et al., 2021;
Yilanci, et al., 2023; Mert & Caglar, 2020;; Balsalobre-Lorente et al., 2019). The Pollution Heaven
hypothesis suggests that FDI flows from advancedeconomies to developing economies with
weaker environmental regulations, potentially leading to increased pollution and environmental
degradation (Apergis et al., 2023; Sapkota & Bastola 2017). Multinational corporations (MNCs)
from developed nations may relocate their production facilities to countries with lax environmental
standards to minimize compliance costs and maximize profits, thus contributing to negative
environmental consequences. Figure 2 represents the adverse association between FDI and carbon
emissions.
Figure 2. FDI and Carbon Emission Linkage

Increased
Foreign Boost in Production Higher Escalation
Direct Industrial and Energy in Carbon
Investment Activities Consumpti Demand Emissions
on

In contrast, the Pollution Halo hypothesis proposes that FDI can have a positive effect on the
environment. It argues that FDI brings advanced technologies, managerial practices, and capital
investment that promote cleaner and more sustainable production processes (Zhou et al., 2022;
Abdo et al., 2023). MNCs from developed countries can transfer their advanced environmental
technologies and practices to their subsidiaries in developing countries, leading to improvements
in environmental quality. However, the actual relationship between FDI and environmental
degradation is complex and depends on factors such as industry characteristics, host country
environmental policies, and corporate social responsibility practices. Consequently, a nuanced
analysis is necessary to understand the environmental impacts of FDI and implement appropriate
policies for sustainable development. Moreover, technology innovation is closely intertwined with
environmental quality as it drives the development of cleaner technologies, enhances resource
efficiency, enables the advancement of renewable energy solutions, and strengthens environmental
monitoring and management practices (Ramzan et al., 2022). These technological advancements
empower us to reduce pollution, optimize resource utilization, shift towards sustainable energy
sources, and effectively safeguard and regulate our environmental resources, leading to a healthier
and more sustainable planet for future generations.
635 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

3. Literature Review
The literature review section aims to explore the existing body of research on the influence of
various factors on carbon emissions. This study focuses on assessing the influence of five key
variables, namely GDP, financial development, foreign direct investment (FDI), technological
innovations, and population density. Understanding the linkage between these factors and carbon
emissions is crucial in formulating effective policies and strategies to address environmental
concerns. By reviewing relevant studies and analyzing their findings, this section aims to provide
valuable insights into the complex interplay between these variables and their implications for
carbon emissions. Recently, numerous studies have attempted to sort out significant factors of
environmental quality by using carbon emissions, ecological footprints, and greenhouse gases as
proxyes of environmental degradation (e.g., Shaheen et al., 2022; Acevedo-Ramos et al., 2023;
Ponce et al., 2023; Uddin et al., 2023; Hussain & Rehman, 2021). Wang et al. (2023) examined
globalization, FDI inflow, GDP growth, innovation, financial development, and urbanization's
impact on carbon emissions in China. Findings show the negative effects of globalization, FDI,
and innovation, while GDP growth, financial development, and urbanization enhance
environmental degradation. Rehman (2020) examined the impact of GDP growth, population
density, and international trade on environmental quality and energy consumption in India for the
period 1971–2011 using the ARDL method. The findings indicated a positive influence of
population density and GDP growth on energy consumption. Additionally, a direct linkage was
observed between energy consumption, population density, and environmental pollution in India.
Wang et al. (2020) examine carbon emissions dynamics in N-11 countries for the time period
1990–2017 and introduce innovative factors. Empirical estimations show positive links between
carbon emissions, financial development, and GDP, while technological innovation and renewable
energy have adverse relationships. Hao et al. (2020) examined technological innovations and FDI's
impact on environmental degradation in 30 selected Chinese provinces for a time span of 1998–
2016. Panel regression analysis revealed FDI's positive environmental role. Technological
innovation significantly reduced smoke dust and sulfur dioxide but had an adverse effect on
chemical oxygen demand. Tan et al. (2021) employed ARDL to analyze the effects of energy
consumption, FDI, financial development, and domestic credit on air quality in China during the
period of 1995–2018. Findings revealed a long-term positive impact of energy consumption on air
quality and a short-term positive impact of financial development and domestic credit. The study
recommended promoting low-interest domestic credit for renewable energy adoption and
improved air quality.
In their investigation spanning from 1990 to 2018, Zafar et al. (2020) explored the impact of
urbanization, FDI, education, and energy consumption on environmental pollution in Asia.
Employing FMOLS and DOLS, they revealed that FDI, urbanization, and education significantly
influenced environmental quality, while energy consumption and income were detrimental. They
proposed policies encouraging green technology, boosting educational budgets, and implementing
planned urbanization for a sustainable environment. Abbas et al. (2021) examined the influence of
energy consumption, regulatory quality sustainability, and FDI on greenhouse gas emissions in 27
Asian economies for the time span of 2001–2018. The GMM analysis revealed the significant role
of regulatory quality in reducing GHG emissions. Energy consumption had an adverse effect on

636 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

GHGs, while FDI supported the development of institutional quality. Ochoa-Moreno et al. (2021)
employed DOLS to investigate the effects of FDI on environmental quality across various income
groups (low, middle, and high) during 1990–2018. Their findings indicated an inverse association
between FDI and carbon emissions. Their empirical results led to the recommendation of using
short-term FDI to stimulate economic growth, while long-term FDI should be accompanied by
stringent environmental regulations. Adams et al. (2020) emphasized the impact of urbanization
and transportation on environmental degradation in 19 economies in sub-Saharan Africa (SSA)
from 1980 to 2011. Utilizing the GMM approach, the study found a direct linkage between
transport energy consumption and environmental pollution. Furthermore, urbanization exhibited a
negative coefficient value for carbon emissions. Yahaya et al. (2020) used the ARDL approach to
analyze Nigeria’s population-environment nexus (1980–2014). Long-run findings revealed a
positive influence of financial development and population growth on CO2 emissions, while trade
improved environmental quality. The study highlighted the importance of public awareness and
population regulation to enhance environmental quality. Furthermore, Huang et al. (2023) applied
the ARDL method to investigate the connection between business cycle synchronization,
urbanization, FDI, exports, imports, and environmental degradation in Pakistan for the time period
1975–2017. The study revealed that all explanatory factors, except FDI, were significant
contributors to environmental degradation. Specifically, imports and urbanization exhibited a
direct and significant influence on environmental degradation.
Cheng et al. (2020) studied pollution heaven and halo hypotheses in 285 Chinese cities for a time
span of 2003–2016. FDI positively influenced urban environmental pollution, but its intensity
varied with cities' economic development. Early industrialization had less environmental harm
than later stages. Using a dynamic spatial method, Wang et al. (2021) investigated the nexus
between FDI and CO2 emissions in 30 selected provinces of China from 2004 to 2016. The study
revealed a non-linear, "inverted U-shaped" connection between FDI and CO2 emissions. The
initial influence of FDI on CO2 emissions raised concerns for policymakers regarding
environmental quality. Furthermore, the study concluded that the emission trading system has a
negative effect on carbon emissions. Moreover, Gyamfi et al. (2022) examined the effects of
technological innovation, industrialization, FDI inflows, total reserves, and natural resources on
carbon emissions in BRICS economies during 1990–2019. Using AMG, Driscoll-Kraay
estimators, and CCEMG, the study assessed the relationship among environmental quality factors.
Findings showed renewable energy and technological innovations reduced carbon emissions,
while FDI and industrialization harmed the environment. Chen and Lee (2020) examined the effect
of technological innovation and R&D intensity on CO2 emissions across 96 global economies for
the time span of 1996–2018. Using a spatial econometric method, the study revealed that
technological innovations did not have a significant mitigation effect on CO2 emissions.
Furthermore, R&D intensity was found to have a direct effect on carbon emissions in certain
nations. Sinha et al. (2020) employed the rolling window heterogeneous panel casualty approach
and bootstrapped quantile regression to assess the influence of technological innovations on
environmental quality in the Next 11 (N11) economies for the time duration of 1990–2017. The
study revealed a negative impact of technology on air pollution in low and medium quantiles,
while a positive influence was observed in higher quintiles.

637 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Xie et al. (2020) employed panel smooth transition regression to analyze FDI's spillover impact
on carbon emissions in emerging economies. Results indicated a positive impact of FDI on carbon
emissions, yet FDI's influence through GDP growth could mitigate environmental degradation.
Nonlinear marginal analysis revealed significant V+W-shaped effects of FDI on environmental
degradation, exhibiting regional heterogeneity. For instance, Islam et al. (2021) employed dynamic
ARDL simulations to examine the effects of technological innovations, economic growth, FDI,
and globalization on environmental quality in the context of Bangladesh from 1972 to 2016. The
study revealed that energy consumption, trade, urbanization, and economic growth had a negative
impact on environmental quality. Conversely, technological innovations, FDI, and globalization
played a supportive role in enhancing environmental quality in Bangladesh.
4. Data and Methodology
Taking into consideration the preceding conversation, this study presents a framework that aims
to examine the influence of foreign direct investment, GDP, population density, financial
development, and technological innovations on carbon emissions in Pakistan. To analyze the
environmental degradation, the model used in this research adopts the subsequent functional form,
represented by Equation 1:
𝐶𝑂𝐸𝑀 = 𝑓 (𝐺𝐷𝑃𝑃𝐶, 𝑇𝐼𝑁𝑂, 𝐹𝐷𝐼𝑁𝑉, 𝑃𝐷𝐸𝑁, 𝐹𝐷𝐸𝑉, 𝑅𝐸𝐶𝑂𝑁) (1)
The variables are described in the following table (1), showing variable name, proxy used, unit of
measurement, data source, and time period.
Table 1: Variable Descriptions

Time
Codes Name of Variable Proxy/Unit Source
period

World 1990-
COEM Carbon Emissions Co2 emissions (Kt)
Bank 2020

GDP per capita (current World 1990-

GDPPC GDP Per Capita
US$) Bank 2020

World 1990-
TINO Technology Innovation Patent applications, residents
Bank 2020

Foreign direct investment, World 1990-

FDINV Foreign Direct Investment
net inflows (% of GDP) Bank 2020

Population density (people World 1990-

PDEN Population Density
per sq. km of land area) Bank 2020

Domestic credit to private World 1990-

FDEV Financial Development
sector (% of GDP) Bank 2020

638 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Renewable energy
World 1990-
RECON Renewable Energy Consumption consumption (% of total
Bank 2020
final energy consumption)

The econometric representation of the model is provided in Equation 2 as follows:

𝐶𝑂𝐸𝑀 = 𝛼 + 𝛽 𝐺𝐷𝑃𝑃𝐶 + 𝛽 𝑇𝐼𝑁𝑂 + 𝛽 𝐹𝐷𝐼𝑁𝑉 + 𝛽 𝑃𝐷𝐸𝑁 + 𝛽 𝐹𝐷𝐸𝑉 + 𝛽 𝑅𝐸𝐶𝑂𝑁
+ 𝜀 (2)
In the model equation, the constant term is symbolized by α, and the coefficients of the explanatory
variables are represented by β₁, β₂, β₃, β₄, β₅, and β₆ and variable are used after converting the series
into log form. The error term is symbolized as εₜ, and the variable t represents the time period from
1990 to 2020. Descriptive statistics of the variables utilized in the study, are shown in the table 2,
given below.Table 2 presents the descriptive statistics for the variables of the study:
Table 2: Descriptive Statistics of the Variables

COEM GDPPC PDEN TINO FDEV FDINV RECON

124070. 1.56E+0
Mean 807.9110 224.4349 108.8387 21.40149 49.11114
7 9

121672. 1.12E+0
Median 688.5006 226.1988 91.00000 22.31456 47.96000
7 9

202047. 5.59E+0
Maximum 1620.743 294.7239 338.0000 28.73378 58.09129
2 9

59026.0 2.45E+0
Minimum 346.6685 149.7173 16.00000 14.68225 42.09000
0 8

42144.6 1.41E+0
Std. Dev. 405.1925 45.07955 91.57805 4.371632 4.276169
7 9

0.24568 - -
Skewness 0.591588 1.083672 1.558374 0.350247
6 0.100503 0.186495

2.01890
Kurtosis 1.991435 1.727227 3.329200 1.682836 4.972795 2.333004
9

Jarque- 1.55514
3.122097 2.144624 6.207425 2.420636 17.57446 1.208452
Bera 9

0.45951
Probability 0.209916 0.342216 0.044882 0.298102 0.000153 0.546497
9

639 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

384619 4.82E+1
Sum 25045.24 6957.481 3374.000 663.4462 1522.445
2. 0

Sum Sq. 5.33E+ 5.97E+1

4925429. 60964.97 251596.2 573.3349 548.5687
Dev. 10 9

Observatio
31 31 31 31 31 31 31
ns

Source: Author’s Calculation

To capture the short-term and long-term relationships among the variables, the study utilizes the
Autoregressive Distributed Lag (ARDL) approach, initially introduced by Pesaran et al. (1997). In
order to confirm the presence of cointegration within the model, the error correction version of the
ARDL method (Pesaran et al., 2001) is employed, and its equation (3) is presented below.

𝛥𝐶𝑂𝐸𝑀 = 𝛼 + 𝑏 𝛥𝐶𝑂𝐸𝑀 + 𝑐 𝛥𝐺𝐷𝑃𝑃𝐶 + 𝑑 𝛥𝑇𝐼𝑁𝑂 + 𝑒 𝛥𝐹𝐷𝐼𝑁𝑉 +

𝑓 𝛥𝑃𝐷𝐸𝑁 + 𝑔 𝛥𝐹𝐷𝐸𝑉 + ℎ 𝛥𝑅𝐸𝐶𝑂𝑁 + 𝛿 𝐶𝑂𝐸𝑀 + 𝛿 𝐺𝐷𝑃𝑃𝐶

+𝛿 𝑇𝐼𝑁𝑂 + 𝛿 𝐹𝐷𝐼𝑁𝑉 + 𝛿 𝑃𝐷𝐸𝑁 + 𝛿 𝐹𝐷𝐸𝑉 + 𝛿 𝑅𝐸𝐶𝑂𝑁 +𝜀 (3)

Equation 3 introduces the operator ∆ as the first difference, and it includes short-run dynamics
represented by the bi, ci, di, ei, fi, gi, and hi. While, long run coefficients are shown as long-run
coefficients δ1, δ2, δ3, δ4, δ5, δ6, and δ7. On the other hand, the long-run coefficients of the model
are determined by employing equation (Eq. 4) within the framework of the ARDL approach.

𝐶𝑂𝐸𝑀 = 𝛼 + 𝛽 𝐶𝑂𝐸𝑀 + 𝛽 𝐺𝐷𝑃𝑃𝐶 + 𝛽 𝑇𝐼𝑁𝑂 + 𝛽 𝐹𝐷𝐼𝑁𝑉 +

𝛽 𝑃𝐷𝐸𝑁 + 𝛽 𝐹𝐷𝐸𝑉 + 𝛽 𝑅𝐸𝐶𝑂𝑁 +𝜀 (4)

5. Results and Discussions

The study utilized Augmented Dickey Fuller (ADF) and Phillips Perron (PP) unit root tests to
verify the stationarity of variables. The researchers applied the f-bounds test to examine the
existence of co-integration in the model. The long-term and short-term impacts of explanatory
factors have been captured using the ARDL and ECM methods. Causality linkages were explored
using the Granger causality test. We present and discuss the findings from all the aforementioned
methods below.
The sequence of econometric methods applied in the study is given in Figure 3.
Figure 3. Econometric Methods of the Study

640 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

ADF and PP Unit Root Test

F-Bounds Test

ARDL Approach

Error Correction Regression

Granger Causality Test

Table 2: Unit Root Tests

ADF Test PP Test
Variables
Level First Diff. Stationary Level First Diff. Stationary

-4.684*** -4.883*** -2.347 -4.856***

COEM I(0), I(1) I(1)
(0.005) (0.003) (0.398) (0.002)

-2.634 -3.118** -1.867 -3.862**

GDPPC I(1) I(1)
(0.269) (0.037) (0.646) (0.026)

-0.713 -3.700** -0.592 -3.918**

PDEN I(1) I(1)
( 0.961) (0.039) (0.972) (0.021)

-1.823 -6.828*** -1.682 -6.922***

TINO I(1) I(1)
(0.668) (0.000) (0.734) (0.000)

-1.683 -4.437*** -1.938 -4.436***

FDEV I(1) I(1)
(0.734) (0.007) (0.610) (0.007)

-2.849 -3.724** -2.225 -3.724**

FDINV I(1) I(1)
(0.193) (0.036) (0.459) (0.036)

-3.827** -5.198*** -3.755** -5.197***

RECON I(0), I(1) I(0), I(1)
(0.021) (0.001) (0.022) (0.001)

Note: *, **, *** significant at 10%, 5% and 1% level respectively

The results of the unit root tests, namely the ADF and PP tests, as presented in Table 2, provide
valuable insights into the stationary behavior of the variables employed in the regression analysis.
641 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

In the case of carbon emissions and renewable energy consumption, both tests indicate that these
variables are stationary at both the level and the first difference. This suggests a stable, long-run
relationship without any long-term trends or drifts. Short-term fluctuations, rather than
fundamental shifts in the underlying structure, account for the observed changes in carbon
emissions and renewable energy consumption. Conversely, the remaining variables, including
technological innovation, foreign direct investment, financial development, GDP per capita, and
population density, were found to be stationary only at the first difference.
The combination of variables exhibiting both stationary levels and first differences strengthens the
suitability of the ARDL method for the regression analysis. The ARDL approach allows for the
incorporation of variables with different stationary properties in the same model, accommodating
the diverse characteristics of the variables under investigation. Furthermore, the consistency of
results between the ADF and PP tests highlights the robustness and reliability of the findings. The
agreement between these tests reinforces the validity of the conclusions drawn from the unit root
analysis, providing confidence in the subsequent regression analysis.
The F-Bounds test confirmed the existence of cointegration in the model, with a significant F-
statistic of 6.273, exceeding the critical values of 3.15 and 4.43, where ‘K’ represents the number
of explanatory variables. This supports the alternative hypothesis and permits regression analysis
to estimate the short-term and long-term linkages among the variables. Cointegration signifies a
stable, long-term association between the variables, enabling a deeper understanding of their
interactions over time.
Table 3: F-Bounds Test
F-statistic = 6.273*** K=6

Critical Value Bounds

Significance Lower Bound Upper Bound

10 percent 2.12 3.23

5 percent 2.45 3.61

2.5 percent 2.75 3.99

1 percent 3.15 4.43

Note. *** shows significant at 1% level

Table 4: ARDL Long-Term Estimates
Dependent Variable = 𝐂𝐎𝐄𝐌

Variables Coefficients Standard Error t-Statistics Prob.

GDPPC -0.053084 0.019717 -2.692345 0.0209**

642 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

FDEV -0.224492 0.019608 -11.449003 0.0000***

FDINV 0.059494 0.005924 10.043106 0.0000***

TINO 0.017027 0.007282 2.338317 0.0393**

PDEN 0.794246 0.044922 17.680474 0.0000***

RECON -1.589081 0.137922 -11.521605 0.0000***

C 13.246479 0.845283 15.671063 0.0000***

Note: *, **, *** significant at 10%, 5% and 1% level respectively

The findings from the ARDL analysis show valuable insights into the relationship between various
independent variables and environmental degradation, as measured by carbon emissions in
Pakistan (presented in Table 4). Firstly, higher GDP per capita is associated with lower
environmental degradation, suggesting that economic prosperity promotes the adoption of cleaner
technologies and environmental regulations, leading to reduced carbon emissions and a matching
outcome, as revealed by Mansoor and Sultana (2018). Additionally, the study reveals that financial
development has an inverse influence on environmental degradation in Pakistan. This implies that
a well-developed financial sector enables investments in cleaner technologies and sustainable
practices, contributing to a decrease in carbon emissions. Aljadani, (2022). Technological
innovation also demonstrates a positive impact in Pakistan, indicating that advancements in
technology can drive more efficient and environmentally friendly production processes, further
reducing environmental degradation (Adebayo et al., 2021). In contrast, FDI shows a direct effect
on environmental degradation in Pakistan, indicating that the country may face challenges in
managing its environmental impact as it attracts FDI. This could be due to the potential arrival of
industries with lower environmental standards or increased resource exploitation to meet foreign
demands (Singhania & Saini, 2021). However, it is worth noting that effective environmental
regulations and sustainable policies can help mitigate the positive influence of FDI on
environmental degradation in Pakistan. Moreover, population density exhibits a positive influence
on environmental degradation in Pakistan, suggesting that densely populated areas tend to have
higher carbon emissions. This is likely due to the increased resource consumption and energy
demand associated with higher population densities (Solarin, 2020). The study reveals a
correlation between higher renewable energy consumption and reduced environmental
degradation in Pakistan. This underscores the significance of transitioning to renewable energy
sources as a means to mitigate carbon emissions and promote environmental sustainability in the
country (Sharif et al., 2019).
Short-run linkages among the variables are captured through the error correction method, as shown
in Table 5. The results obtained through the error correction method of the ARDL approach
provide significant insights into the relationship between the variables and carbon emissions. The
value of the error correction term showed 73.2 percent convergence in the model in the short run.
The high R-squared value of 0.954 suggests that the model explains 95.4% of the total variation,
643 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

indicating a strong fit. The low standard error of regression, 0.015, signifies precise estimates. The
included variables explain 88.2% of the variation in carbon emissions, as indicated by the adjusted
R-squared value of 0.882, considering the number of variables and observations, highlighting a
robust relationship. The F-statistic's probability of 0.000, below 0.01, indicates the model's
statistical significance, suggesting that at least one variable significantly impacts carbon emissions.
The Durbin-Watson statistic of 2.629 falls within the acceptable range, indicating no significant
autocorrelation. Additionally, the F-statistic of 13.345 reveals the joint significance of short-run
coefficients, emphasizing their significant impact on carbon emissions.
Table 5: Short Run Estimates of Error Correction Model
Dependent Variable: COEM

Selected Model: ARDL(2, 0, 2, 2, 1, 2, 2)

Sample: 1990-2020

Variable Coefficient Std. Error t-Statistic Prob.

D(COEM(-1)) 0.548578 0.302874 1.811244 0.0975

D(GDPPC) -0.133144 0.051412 -2.589749 0.0251**

D(FDEV) -0.248423 0.058651 -4.235596 0.0014***

D(FDEV(-1)) 0.142981 0.082217 1.739072 0.1099

D(FDINV) 0.056888 0.011064 5.141613 0.0003***

D(FDINV(-1)) -0.037097 0.016496 -2.248908 0.0460**

D(TINO) 0.004469 0.016560 0.269856 0.7923

D(PDEN) 13.294481 4.345629 3.059277 0.0109***

D(PDEN(-1)) -7.518977 2.133599 -3.524082 0.0048***

D(RECON) -1.372773 0.197226 -6.960401 0.0000***

D(RECON(-1)) 0.746762 0.481263 1.551673 0.1490

CointEq(-1) -0.732430 0.058970 -15.671063 0.0000***

R-squared 0.953754 S.E. of 0.015508

regression

Adjusted R-squared 0.882284 Prob(F-statistic) 0.000052

644 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Durbin-Watson stat 2.629390 F-statistic 13.34474

Note: *, **, *** significant at 10%, 5% and 1% level respectively
We used the Granger causality test to estimate the causal linkage between carbon emissions and
each independent variable. The results of this analysis are summarized in Table 6. The outcomes
indicate that carbon emissions exhibit a unidirectional linkage with GDPPC, FDEV, and RECON.
Furthermore, carbon emissions exhibit a bidirectional relationship with both PDEN and TINO.
However, no causal linkage is detected between carbon emissions and FDINV.

Table 6: Granger Causality Analysis

Pair of variables F-Statistic Probability Causality
GDPPC to COEM 1.24500 0.3059 Unidirectional
COEM to GDPPC 2.97560 0.0701*
FDEV to COEM Unidirectional
1.86870 0.1761
COEM to FDEV
2.91118 0.0738*
FDINV to COEM No Causality
1.54094 0.2346
COEM to FDINV
0.89162 0.4231
PDEN to COEM Bidirectional
7.29561 0.0033***
COEM to PDEN
12.8308 0.0002***
TINO to COEM Bidirectional
3.51281 0.0459**
COEM to TINO
13.4651 0.0001***
RECON to COEM Unidirectional
2.38743 0.1133
COEM to RECON
3.71353 0.0393**
Note: *, **, *** significant at 10%, 5% and 1% level respectively
Findings of the stability tests including CUSUM and CUSUM square depicted the stability of the
coefficients of the model. Outcomes of both stability tests are shown in figure 4 and figure 5.
Figure 4.CUSUM Test

645 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

15

10

-5

-10

-15
94 96 98 00 02 04 06 08 10 12 14

CUSUM 5% Significance

Figure 5. CUSUM Square Test

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0.0

-0.2

-0.4
94 96 98 00 02 04 06 08 10 12 14

CUSUM of Squares 5% Significance

6. Conclusion and Policy Recommendations

To tackle the alarming issue of environmental degradation, the present study has examined key
responsible factors of carbon emissions in Pakistan for the time period of 1990–2020. The F-
bounds test provided evidence of cointegration in the model, suggesting a long-term linkage
between the variables. The findings from the ARDL approach revealed several important insights.
The findings from the ARDL approach revealed that GDP per capita negatively impacts
environmental degradation, indicating a link between economic growth per person and lower
carbon emissions. This highlights the importance of sustainable economic development policies
that promote resource efficiency and environmental conservation. Secondly, the study found that
financial development negatively impacts environmental degradation. This suggests that a well-
developed financial sector, characterized by efficient allocation of resources and investments in
environmentally friendly projects, can contribute to reducing carbon emissions. Thirdly, the study
found that technological innovation directly influences environmental degradation. This
646 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

underscores the need for policies that foster green innovation and promote the adoption of clean
technologies to mitigate the adverse environmental effects of economic activities. In addition,
researchers discovered that population density positively contributes to environmental
degradation. This implies that rapid urbanization and population growth can exacerbate
environmental challenges. Therefore, urban planning strategies that prioritize sustainable
infrastructure, efficient resource management, and environmentally conscious practices are
essential. Lastly, renewable energy consumption was found to have an inverse influence on
environmental degradation. This emphasizes the significance of transitioning towards renewable
energy sources to reduce carbon emissions and promote sustainable energy practices.
Based on the findings of the study, we propose the following policy suggestions for Pakistan to
reduce environmental degradation and carbon emissions: Firstly, to address the negative impact of
GDP and financial development on carbon emissions, the government should prioritize policies
that promote sustainable and eco-friendly industries, encouraging a shift towards green economic
growth. Secondly, to leverage the positive relationship between FDI and carbon emissions,
Pakistan should actively attract foreign investors seeking environmentally responsible projects,
providing incentives and support to drive green investments. Thirdly, to capitalize on the positive
impact of technological innovation on carbon emissions, the country must invest in the research
and development of clean technologies and foster an environment that supports the implementation
of energy-efficient solutions. Furthermore, to address the positive correlation between population
density and carbon emissions, the country should implement smart urban planning initiatives that
emphasize efficient public transportation and green infrastructure within cities. Furthermore, to
enhance the negative relationship between renewable energy consumption and carbon emissions,
the government should prioritize the adoption and expansion of renewable energy sources through
favorable policies and incentives for consumers and businesses. By implementing these individual
policy measures while strengthening environmental regulations, Pakistan can work towards
mitigating environmental degradation and promoting a more sustainable future.
References:
Abbas, H. S. M., Xu, X., Sun, C., Ullah, A., Nabi, G., Gillani, S., & Raza, M. A. A. (2021).
Sustainable use of energy resources, regulatory quality, and foreign direct investment in
controlling GHGs emissions among selected Asian economies. Sustainability, 13(3), 1123.
Abdo, A. B., Li, B., Zhang, X., Lu, J., & Rasheed, A. (2020). Influence of FDI on environmental
pollution in selected Arab countries: a spatial econometric analysis perspective. Environmental
Science and Pollution Research, 27, 28222-28246.
Acevedo-Ramos, J. A., Valencia, C. F., & Valencia, C. D. (2023). The Environmental Kuznets
Curve hypothesis for Colombia: impact of economic development on greenhouse gas emissions
and ecological footprint. Sustainability, 15(4), 3738.
Acheampong, A. O., Dzator, J., Dzator, M., & Salim, R. (2022). Unveiling the effect of transport
infrastructure and technological innovation on economic growth, energy consumption and CO2
emissions. Technological Forecasting and Social Change, 182, 121843.

647 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Adams, S., Boateng, E., &Acheampong, A. O. (2020). Transport energy consumption and
environmental quality: does urbanization matter?. Science of the Total Environment, 744, 140617.
Adebayo, T. S., Coelho, M. F., Onbaşıoğlu, D. Ç., Rjoub, H., Mata, M. N., Carvalho, P. V.,
&Adeshola, I. (2021). Modeling the dynamic linkage between renewable energy consumption,
globalization, and environmental degradation in South Korea: does technological innovation
matter?. Energies, 14(14), 4265.
Ahmad, M., & Wu, Y. (2022). Combined role of green productivity growth, economic
globalization, and eco-innovation in achieving ecological sustainability for OECD
economies. Journal of Environmental Management, 302, 113980.
Ahmad, M., Jabeen, G., & Wu, Y. (2021). Heterogeneity of pollution haven/halo hypothesis and
environmental Kuznets curve hypothesis across development levels of Chinese provinces. Journal
of Cleaner Production, 285, 124898.
Alharthi, M., Hanif, I., &Alamoudi, H. (2022). Impact of environmental pollution on human health
and financial status of households in MENA countries: Future of using renewable energy to
eliminate the environmental pollution. Renewable Energy, 190, 338-346.
Aljadani, A. (2022). Assessment of financial development on environmental degradation in KSA:
how technology effect?. Environmental Science and Pollution Research, 29(3), 4736-4747.
Apergis, N., Pinar, M., &Unlu, E. (2023). How do foreign direct investment flows affect carbon
emissions in BRICS countries? Revisiting the pollution haven hypothesis using bilateral FDI flows
from OECD to BRICS countries. Environmental Science and Pollution Research, 30(6), 14680-
14692.
Assi, A. F., Isiksal, A. Z., &Tursoy, T. (2021). Renewable energy consumption, financial
development, environmental pollution, and innovations in the ASEAN+ 3 group: Evidence from
(P-ARDL) model. Renewable Energy, 165, 689-700.
Balsalobre-Lorente, D., Gokmenoglu, K. K., Taspinar, N., & Cantos-Cantos, J. M. (2019). An
approach to the pollution haven and pollution halo hypotheses in MINT countries. Environmental
Science and Pollution Research, 26, 23010-23026.
Bilgili, F., Khan, M., & Awan, A. (2023). Is there a gender dimension of the environmental
Kuznets curve? Evidence from Asian countries. Environment, Development and
Sustainability, 25(3), 2387-2418.
Boubellouta, B., & Kusch-Brandt, S. (2020). Testing the environmental Kuznets Curve hypothesis
for E-waste in the EU28+ 2 countries. Journal of Cleaner Production, 277, 123371.
Chen, X., Rahaman, M. A., Murshed, M., Mahmood, H., & Hossain, M. A. (2023). Causality
analysis of the impacts of petroleum use, economic growth, and technological innovation on
carbon emissions in Bangladesh. Energy, 267, 126565.
Chen, Y., & Lee, C. C. (2020). Does technological innovation reduce CO2 emissions? Cross-
country evidence. Journal of Cleaner Production, 263, 121550.

648 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Cheng, Z., Li, L., & Liu, J. (2020). The impact of foreign direct investment on urban PM2. 5
pollution in China. Journal of environmental management, 265, 110532.
Elum, Z. A., &Momodu, A. S. (2017). Climate change mitigation and renewable energy for
sustainable development in Nigeria: A discourse approach. Renewable and Sustainable Energy
Reviews, 76, 72-80.
Guo, M., Chen, S., Zhang, J., &Meng, J. (2022). Environment Kuznets Curve in transport sector's
carbon emission: Evidence from China. Journal of Cleaner Production, 371, 133504.
Gyamfi, B. A., Agozie, D. Q., &Bekun, F. V. (2022). Can technological innovation, foreign direct
investment and natural resources ease some burden for the BRICS economies within current
industrial era?. Technology in Society, 70, 102037.
Hao, Y., Wu, Y., Wu, H., & Ren, S. (2020). How do FDI and technical innovation affect
environmental quality? Evidence from China. Environmental Science and Pollution Research, 27,
7835-7850.
Huang, Y., Xu, F., Abbas, A., Cong, P. T., Zhang, Y. &, Kim, E. (2023). Empirical impact of
China-Pak business cycle synchronization on environmental degradation in Pakistan. Frontiers in
Environmental Science 10. 1-11.
Hussain, I., &Rehman, A. (2021). Exploring the dynamic interaction of CO2 emission on
population growth, foreign investment, and renewable energy by employing ARDL bounds testing
approach. Environmental Science and Pollution Research, 28, 39387-39397.
Islam, M. M., Khan, M. K., Tareque, M., Jehan, N., &Dagar, V. (2021). Impact of globalization,
foreign direct investment, and energy consumption on CO2 emissions in Bangladesh: Does
institutional quality matter?. Environmental Science and Pollution Research, 28(35), 48851-
48871.
Islam, M. S. (2022). Does financial development cause environmental pollution? Empirical
evidence from South Asia. Environmental Science and Pollution Research, 29(3), 4350-4362.
Jahanger, A., Hossain, M. R., Onwe, J. C., Ogwu, S. O., Awan, A., &Balsalobre-Lorente, D.
(2023). Analyzing the N-shaped EKC among top nuclear energy generating nations: a novel
dynamic common correlated effects approach. Gondwana Research, 116, 73-88.
Kunkel, S., &Matthess, M. (2020). Digital transformation and environmental sustainability in
industry: Putting expectations in Asian and African policies into perspective. Environmental
science & policy, 112, 318-329.
Li, X., &Ullah, S. (2022). Caring for the environment: how CO2 emissions respond to human
capital in BRICS economies?. Environmental Science and Pollution Research, 29(12), 18036-
18046.
Liu, H., Alharthi, M., Atil, A., Zafar, M. W., & Khan, I. (2022). A non-linear analysis of the
impacts of natural resources and education on environmental quality: Green energy and its role in
the future. Resources Policy, 79, 102940.

649 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Maiurova, A., Kurniawan, T. A., Kustikova, M., Bykovskaia, E., Othman, M. H. D., Singh, D., &
Goh, H. H. (2022). Promoting digital transformation in waste collection service and waste
recycling in Moscow (Russia): Applying a circular economy paradigm to mitigate climate change
impacts on the environment. Journal of Cleaner Production, 354, 131604.
Malik, S., Abbas, A., Shabbir, M. S., & Ramos-Meza, C. S. (2023). Business Cycle Fluctuations,
Foreign Direct Investment, and Real Effective Exchange Rate Nexus Among Asian
Countries. Journal of the Knowledge Economy, 1-14.
Mansoor, A., & Sultana, B. (2018). Impact of population, GDP and energy consumption on carbon
emissions: Evidence from Pakistan using an analytic tool IPAT. Asian Journal of Economics and
Empirical Research, 5(2), 183-190.
Mert, M., &Caglar, A. E. (2020). Testing pollution haven and pollution halo hypotheses for
Turkey: a new perspective. Environmental Science and Pollution Research, 27, 32933-32943.
Mohamed, M. M. A., Liu, P., &Nie, G. (2022). Causality between technological innovation and
economic growth: evidence from the economies of developing countries. Sustainability, 14(6),
3586.
Mohsin, M., Naseem, S., Zia‐ur‐Rehman, M., Baig, S. A., &Salamat, S. (2023). The crypto‐trade
volume, GDP, energy use, and environmental degradation sustainability: An analysis of the top 20
crypto‐trader countries. International Journal of Finance & Economics, 28(1), 651-667.
Nikensari, S. I., Destilawati, S., &Nurjanah, S. (2019). Studi environmental kuznets curve di asia:
sebelumdansetelah millennium development goals. JurnalEkonomidan Pembangunan, 27(2), 11-
25.
Ochoa-Moreno, W. S., Quito, B. A., & Moreno-Hurtado, C. A. (2021). Foreign direct investment
and environmental quality: Revisiting the EKC in Latin American
countries. Sustainability, 13(22), 12651.
Ozcan, B., &Ulucak, R. (2021). An empirical investigation of nuclear energy consumption and
carbon dioxide (CO2) emission in India: Bridging IPAT and EKC hypotheses. Nuclear
Engineering and Technology, 53(6), 2056-2065.
Pesaran, M. H., &Pesaran, B. (1997). Working with Microfit 4.0: interactive econometric
analysis;[Windows version]. Oxford University Press.
Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level
relationships. Journal of applied econometrics, 16(3), 289-326.
Ponce, P., Álvarez-García, J., Álvarez, V., & Irfan, M. (2023). Analysing the influence of foreign
direct investment and urbanization on the development of private financial system and its
ecological footprint. Environmental Science and Pollution Research, 30(4), 9624-9641.
Pradhan, A. K., Sachan, A., Sahu, U. K., &Mohindra, V. (2022). Do foreign direct investment
inflows affect environmental degradation in BRICS nations?. Environmental Science and
Pollution Research, 29, 690-701.

650 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Prajapati, P., Varjani, S., Singhania, R. R., Patel, A. K., Awasthi, M. K., Sindhu, R., ...
&Chaturvedi, P. (2021). Critical review on technological advancements for effective waste
management of municipal solid waste—Updates and way forward. Environmental Technology &
Innovation, 23, 101749.
Rahman, M. M. (2020). Exploring the effects of economic growth, population density and
international trade on energy consumption and environmental quality in India. International
Journal of Energy Sector Management, 14(6), 1177-1203.
Ramzan, M., Raza, S. A., Usman, M., Sharma, G. D., & Iqbal, H. A. (2022). Environmental cost
of non-renewable energy and economic progress: do ICT and financial development mitigate some
burden?. Journal of Cleaner Production, 333, 130066.
Ramzan, M., Razi, U., Quddoos, M. U., & Adebayo, T. S. (2023). Do green innovation and
financial globalization contribute to the ecological sustainability and energy transition in the
United Kingdom? Policy insights from a bootstrap rolling window approach. Sustainable
Development, 31(1), 393-414.
Romero‐Hernández, O., & Romero, S. (2018). Maximizing the value of waste: From waste
management to the circular economy. Thunderbird International Business Review, 60(5), 757-
764.
Saleem, H., Jiandong, W., Zaman, K., Elashkar, E. E., &Shoukry, A. M. (2018). The impact of
air-railways transportation, energy demand, bilateral aid flows, and population density on
environmental degradation: Evidence from a panel of next-11 countries. Transportation Research
Part D: Transport and Environment, 62, 152-168.
Sapkota, P., &Bastola, U. (2017). Foreign direct investment, income, and environmental pollution
in developing countries: Panel data analysis of Latin America. Energy Economics, 64, 206-212.
Saqib, N., Sharif, A., Razzaq, A., & Usman, M. (2023). Integration of renewable energy and
technological innovation in realizing environmental sustainability: the role of human capital in
EKC framework. Environmental Science and Pollution Research, 30(6), 16372-16385.
Sarkodie, S. A., Owusu, P. A., &Leirvik, T. (2020). Global effect of urban sprawl,
industrialization, trade and economic development on carbon dioxide emissions. Environmental
Research Letters, 15(3), 034049.
Shaheen, F., Lodhi, M. S., Rosak-Szyrocka, J., Zaman, K., Awan, U., Asif, M., & Siddique, M.
(2022). Cleaner technology and natural resource management: An environmental sustainability
perspective from China. Clean Technologies, 4(3), 584-606.
Sharif, A., Raza, S. A., Ozturk, I., &Afshan, S. (2019). The dynamic relationship of renewable and
nonrenewable energy consumption with carbon emission: a global study with the application of
heterogeneous panel estimations. Renewable energy, 133, 685-691.
Silvestre, B. S., &Ţîrcă, D. M. (2019). Innovations for sustainable development: Moving toward
a sustainable future. Journal of cleaner production, 208, 325-332.
Singhania, M., & Saini, N. (2021). Demystifying pollution haven hypothesis: Role of FDI. Journal
of Business Research, 123, 516-528.
651 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Sinha, A., Sengupta, T., & Alvarado, R. (2020). Interplay between technological innovation and
environmental quality: formulating the SDG policies for next 11 economies. Journal of Cleaner
Production, 242, 118549.
Solarin, S. A. (2020). An environmental impact assessment of fossil fuel subsidies in emerging
and developing economies. Environmental Impact Assessment Review, 85, 106443.
Sovacool, B. K., Griffiths, S., Kim, J., &Bazilian, M. (2021). Climate change and industrial F-
gases: A critical and systematic review of developments, sociotechnical systems and policy
options for reducing synthetic greenhouse gas emissions. Renewable and sustainable energy
reviews, 141, 110759.
Tan, Z., Koondhar, M. A., Nawaz, K., Malik, M. N., Khan, Z. A., &Koondhar, M. A. (2021).
Foreign direct investment, financial development, energy consumption, and air quality: A way for
carbon neutrality in China. Journal of Environmental Management, 299, 113572.
Thornton, P., & Herrero, M. (2010). The inter-linkages between rapid growth in livestock
production, climate change, and the impacts on water resources, land use, and deforestation. World
Bank Policy Research Working Paper, (5178).
Uche, E., Das, N., &Bera, P. (2023). Re-examining the environmental Kuznets curve (EKC) for
India via the multiple threshold NARDL procedure. Environmental Science and Pollution
Research, 30(5), 11913-11925.
Uddin, I., Ullah, A., Saqib, N., Kousar, R., & Usman, M. (2023). Heterogeneous role of energy
utilization, financial development, and economic development in ecological footprint: how far
away are developing economies from developed ones. Environmental Science and Pollution
Research, 30(20), 58378-58398.
Wako, H. A. (2021). Foreign direct investment in sub-Saharan Africa: Beyond its growth
effect. Research in Globalization, 3, 100054.
Wang, C., & Zhang, Y. J. (2020). Does environmental regulation policy help improve green
production performance? Evidence from China's industry. Corporate Social Responsibility and
Environmental Management, 27(2), 937-951.
Wang, J., Yang, L., & Yang, J. (2023). How sustainable environment is influenced by the foreign
direct investment, financial development, economic growth, globalization, innovation, and
urbanization in China. Environmental Science and Pollution Research, 30(17), 49889-49904.
Wang, R., & Tan, J. (2021). Exploring the coupling and forecasting of financial development,
technological innovation, and economic growth. Technological Forecasting and Social
Change, 163, 120466.
Wang, R., Mirza, N., Vasbieva, D. G., Abbas, Q., &Xiong, D. (2020). The nexus of carbon
emissions, financial development, renewable energy consumption, and technological innovation:
what should be the priorities in light of COP 21 Agreements?. Journal of Environmental
Management, 271, 111027.

652 remittancesreview.com
 Remittances Review
January, 2024
Volume: 9, No: 1, 2024
ISSN: 2059-6588 (Print) | ISSN: 2059-6596 (Online)

Wang, X., Zhou, D., &Telli, Ş. (2022). How does financial development alleviate pollutant
emissions in China? A spatial regression analysis. Environmental Science and Pollution
Research, 29(37), 55651-55665.
Wassie, S. B. (2020). Natural resource degradation tendencies in Ethiopia: a
review. Environmental systems research, 9, 1-29.
Xie, Q., Wang, X., & Cong, X. (2020). How does foreign direct investment affect CO2 emissions
in emerging countries? New findings from a nonlinear panel analysis. Journal of Cleaner
Production, 249, 119422.
Yahaya, N. S., Hussaini, M., & Bashir, A. B. (2020). Population growth and environmental
degradation in Nigeria. Academic journal of economic studies, 6(1), 31-35.
Yilanci, V., Cutcu, I., Cayir, B., &Saglam, M. S. (2023). Pollution haven or pollution halo in the
fishing footprint: Evidence from Indonesia. Marine Pollution Bulletin, 188, 114626.
Yue, S., Munir, I. U., Hyder, S., Nassani, A. A., Abro, M. M. Q., & Zaman, K. (2020). Sustainable
food production, forest biodiversity and mineral pricing: Interconnected global issues. Resources
Policy, 65, 101583.
Yu-Ke, C., Hassan, M. S., Kalim, R., Mahmood, H., Arshed, N., & Salman, M. (2022). Testing
asymmetric influence of clean and unclean energy for targeting environmental quality in
environmentally poor economies. Renewable Energy, 197, 765-775.
Zafar, M. W., Qin, Q., & Zaidi, S. A. H. (2020). Foreign direct investment and education as
determinants of environmental quality: The importance of post Paris Agreement (COP21). Journal
of Environmental Management, 270, 110827.
Zakaria, M., & Bibi, S. (2019). Financial development and environment in South Asia: the role of
institutional quality. Environmental Science and Pollution Research, 26, 7926-7937.
Zhang, Y., Khan, I., & Zafar, M. W. (2022). Assessing environmental quality through natural
resources, energy resources, and tax revenues. Environmental Science and Pollution
Research, 29(59), 89029-89044.
Zhou, X., & Zhao, X. (2022). Does diversified environmental regulation make FDI cleaner and
more beneficial to China’s green growth?. Environmental Science and Pollution Research, 29(3),
3487-3497.

653 remittancesreview.com