Impact of Globalisation and Energy Consumption on CO2 Emissions: Empirical Evidence from Lithuania Using Linear and Non-linear ARDL Bound Testing Approach

Abstract

This study examines the symmetric and asymmetric impact of globalisation and energy consumption on Lithuania's carbon dioxide (CO2) emissions using the KOF index of globalisation. Interestingly, the KOF database applies several globalisation gauges, including financial, trade, and overall globalisation. This study employs a series of econometrics techniques using data from 1988 to 2018. The results of the linear and non-linear Autoregressive Distributed Lag (ARDL) bounds testing approach reveal substantial evidence of a long-run association between the study variables. The OLS estimates of the non-linear ARDL model explain that the positive shock in financial globalisation deteriorates CO2 emissions. I could not find such evidence for trade globalisation and overall globalisation. Conversely, energy consumption is the primary source of CO2 emissions in Lithuania.