Greenhouse gas emissions and economic growth in africa: Does financial development play any moderating role?

Abstract

The study had two major objectives. Firstly, to investigate the influence of greenhouse gas emissions (GGE) on economic growth. Secondly, to find out if the interaction between GGE and financial development enhanced economic growth in Southern and Western African nations. Four econometric estimation methods, namely dynamic generalized methods of moments (GMM), pooled ordinary least squares (OLS), fixed and random effects were used with annual data ranging from 2001 to 2012. The impact of GGEs on economic growth was found to be non-significant positive (pooled OLS), non-significant negative (fixed and random effects) and significant positive (dynamic GMM). The interaction between GGEs and financial development was found to have had a significant positive effect on economic growth under the dynamic GMM, fixed and random effects. The non-significant positive influence of GGEs on economic growth is a finding produced by the pooled OLS regression approach.