The Impact of Energy Consumption, Economic Growth, Globalization, Institutional quality and Financial Development on the Environmental Degradation in Pakistan

Abstract

This research shows for the first time in Pakistan examined the impact of energy consumption, economic growth, financial development, globalization and institutional quality on the environmental degradation by using annual time series data for the time period from 1980 to 2020. This study examined the stationarity of the used variables with Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root test respectively. The examined results of ADF and PP unit root test demonstrate that the used variables are stationary with level and first difference that confirms that autoregressive distributed lag model (ARDL) can be applied. The findings of the ARDL short run and long run indicates that energy consumption, economic growth and financial development in Pakistan have positive and significant impact on the environmental degradation while the findings of the globalization and institutional quality indicates negative and significant impact on the environmental degradation both in the long and in the short run respectively.