To what extent does Co2 emissions affect financial development; Evidence from middle eastern oil nations and non-oil nations.

Abstract

Modern Co2 emissions and financial development connection in the middle eastern nations, is an issue that has to be discussed as much as the major contributing nations in terms of Co2 emissions. This paper was an attempt to understand the relation between Co2 Emissions, and financial development in the middle eastern more recently. Several proxies for financial development were investigated, like the world bank, and previous researches in the study. The chosen nations were in terms of producing nations of oil that were Chosen in the middle east, which are Kuwait, Saudi Arabia, and Algeria, and as well as non-oil-Producing nations, which are Egypt, Tunisia, and Morocco. This paper is also investigating the effects of Co2 emissions on financial development with six other independent variables which are energy consumption by metric tons per capita, foreign direct Investment as in terms of inflows percentage of GDP, inflation as a percentage of GDP, urban population growth rate, trade as a percentage of GDP, as well as domestic credit given by banks to the private sector. All these factors were chosen relatively in the research, which is mentioned in terms of the fact that there might be a positive or a negative relationship between the factors and Co2 Emissions in the long run. The time chosen will be focusing on the previous two decades, and the data was extracted from world bank-data with the world bank indicators and world data-atlas knoema database as well. This data was analyzed from 1996 to 2019 and was tested in terms of panel data, the results were considered in the long run and short run.