The effect of economic factors on the quality of the environment in African countries: An application of panel quantile regressions

Background: To mitigate the climate change, several researches have been conducted to determine the determinant factors of CO۲ emissions. Nonetheless, a consensus was failed to reach yet on the issue because many of the previous studies did not deliberate the undetected individual heterogeneity across countries. The study aimed to investigate the effects of economic growth, foreign direct investment and financial development within the research background of seven leading African economies over the ۴۹- year period from ۱۹۷۰ to ۲۰۱۹. Methods: In this study, the determinant factors of environmental quality were examined by employing a panel quantile regression. The advantage of the method is considering the distributional heterogeneity to provide a detailed description regarding the driving factors of carbon emissions. Results: It was revealed that the effects of determinants on CO۲ emissions are heterogeneous. The quantile regression estimate describes that the influence of economic growth on CO۲ emissions is positive and higher at the ۵۰th quantile than in other classes of quantile. The effect of financial development on CO۲ emissions is higher and positive at the ۹۰th quantile compared to other categories of quantile. The FDI influence on CO۲ emissions is heterogeneous across different quantiles and the coefficient is significant and larger at the ۱۰th quantile than in all the other quantiles. Conclusion: In addition, the study recommends that environmental policies that minimize emissions should be enforced for the purpose of making the environment cleaner, FDI should be environmentally friendly, and relevant incentives are required to redirect private credits towards green projects and renewable energy development.

کلیدواژه ها:

Economic growth ، FDI ، Financial development ، Environment ، Quantile regression