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Do government expenditure and financial development impede environmental degradation in Venezuela?

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  • Alotaish Mohammed Saud M.
  • Ping Guo
  • Ihtisham ul Haq
  • Guoqin Pan
  • Alam Khan
Abstract
Environmental degradation is causing global warming, which is of the utmost concern to both physical and social scientists. A number of potential determinants of environmental degradation are analysed in the literature. This study examines the role of government expenditure and financial development in environmental degradation in the context of the environmental Kuznets curve (EKC) hypothesis for the Venezuelan economy. Time series data have been analysed for this purpose. The long-term relationship between the variables in this study is established through a bounds test in the presence of an unknown structural break. The results of this study confirm the EKC hypothesis. It is found that energy use is harming the quality of the environment not only in the long run but also in the short run. This study finds a positive impact of government expenditure on environmental degradation, which indicates that the Venezuelan government is not taking its expenditure for a sustainable environment into account. Moreover, this study finds that financial development is hindering environmental degradation. This means that financial institutions in Venezuela can help to develop the concept of sustainable energy in the country and the Venezuelan government can reduce carbon emissions through financial development.

Suggested Citation

  • Alotaish Mohammed Saud M. & Ping Guo & Ihtisham ul Haq & Guoqin Pan & Alam Khan, 2019. "Do government expenditure and financial development impede environmental degradation in Venezuela?," PLOS ONE, Public Library of Science, vol. 14(1), pages 1-13, January.
    • Handle: RePEc:plo:pone00:0210255
    DOI: 10.1371/journal.pone.0210255
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    5. Yixuan Wang & Ridwan Lanre Ibrahim & David Mautin Oke & Mamdouh Abdulaziz Saleh Al‐Faryan, 2024. "Investigating green energy–environment nexus in post‐COP26 era: Can technological innovation, financial development and government expenditure deliver Africa's targets?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3263-3285, July.
    6. Tijjani Musa Adamu & Ihtisham ul Haq & Muhammad Shafiq, 2019. "Analyzing the Impact of Energy, Export Variety, and FDI on Environmental Degradation in the Context of Environmental Kuznets Curve Hypothesis: A Case Study of India," Energies, MDPI, vol. 12(6), pages 1-18, March.
    7. Wanshu Wu & Kai Zhao, 2023. "Does Upgrading of Industrial Structure Drive Economy to “Decouple” from Environment: an Empirical Analysis Based on the Data of Prefecture-Level Cities in China," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 287-313, March.
    8. Haydar Demirhan, 2020. "dLagM: An R package for distributed lag models and ARDL bounds testing," PLOS ONE, Public Library of Science, vol. 15(2), pages 1-23, February.
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