FINANCIAL SECTOR DEVELOPMENT OF ASEAN COUNTRIES AND ITS IMPACT ON CO2 EMISSION: A PANEL DATA ANALYSIS OF VARIOUS BANKING ASPECTS

Abstract

This paper is an informative approach to critically inspect the influence of financial sector development's dimensions on the CO2 emission within the developing ASEAN states i.e. Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Philippines and Thailand over the period of 1990-2016. The major tested variables of this paper are the number of bank deposits, number of bank branches and ATMs who act as independent variables; CO2 emission act as a dependent variable, while population and gross capital formation act as controlling variables within this research. To justify the hypothesis, the Panel Unit Root Test, Pedroni's Cointegration Test, FMOLS Estimation, and Multicollinearity Test based statistical evaluation performed within this paper. According to the outcomes, it becomes concluded that there is no existence of any null hypothesis and cointegration among the tested variables. In addition, the significant coefficient values of the number of bank branches, number of bank deposits, population, and gross capital formation depicts that these factors directly enhanced the CO2 gas emission based situation within the selected states within the 1990-2016 era. This paper is an informative approach in front of the state's government, policymakers, business community and other related financial institutions to overcome their negative environmental influence by enhancing their work on the green marketing approach. In addition, there is a need to implement the coordination among stakeholders; capacity building and market share based effective controlling variables to enhance its authenticity.