Title: Reinvestigating the determinants of environmental degradation in Nigeria

Authors: Awosusi Abraham Ayobamiji; Demet Beton Kalmaz

Addresses: Department of Economics, Faculty of Economic and Administrative Science, Near East University, Near East Boulevard, Nicosia, Northern Cyprus, TR-10 Mersin, Turkey ' European University of Lefke, Department of Economics, Faculty of Economic and Administrative Science, Lefke, Northern Cyprus, TR-10 Mersin, Turkey

Abstract: This study aims to reinvestigate the impact of economic growth in relation with trade openness, financial development, energy consumption and foreign direct investment to overcome the omitted variable problem on environmental degradation in Nigeria for the years from 1971 to 2015. Bounds test results reveal a cointegrating relationship between variables in the long run. Both in the long and short run, economic growth tends to affect CO2 emissions positively. In the long run, energy consumption positively impacts CO2 emissions while CO2 emissions tend to be negatively affected by foreign direct investment. Furthermore, a robust check was performed through the FMOLS and DOLS to establish the long run effect. Moreover, we employed wavelet coherence based causality test which provided stronger supportive evidence to the long-run estimations of this study. The significance of this study stems from the uniqueness that to the best of our knowledge there has been no study combining these variables in addition to the fact that the econometric techniques employed have not been applied in conjunction to the subject for the case of Nigeria.

Keywords: CO2 emissions; wavelet coherence; economic growth; ARDL bounds test; FMOLS; DOLS.

DOI: 10.1504/IJEPEE.2020.106680

International Journal of Economic Policy in Emerging Economies, 2020 Vol.13 No.1, pp.52 - 71

Received: 07 Jun 2019
Accepted: 17 Oct 2019

Published online: 16 Apr 2020 *

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