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Economic growth, renewable energy and financial development in the CPTPP countries

The trade agreement is generally considered an effective mechanism to encourage trading activities. However, trade activities may lead to environmental degradation because more trade is generally associated with more energy consumption. In addition, financial development with an increased flow of ca...

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Detalles Bibliográficos
Autores principales: Vo, Duc Hong, Tran, Quan, Tran, Thao
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9202881/
https://www.ncbi.nlm.nih.gov/pubmed/35709183
http://dx.doi.org/10.1371/journal.pone.0268631
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author Vo, Duc Hong
Tran, Quan
Tran, Thao
author_facet Vo, Duc Hong
Tran, Quan
Tran, Thao
author_sort Vo, Duc Hong
collection PubMed
description The trade agreement is generally considered an effective mechanism to encourage trading activities. However, trade activities may lead to environmental degradation because more trade is generally associated with more energy consumption. In addition, financial development with an increased flow of capital among members is required to fund trading activities. Renewable energy can be a moderating factor to balance the effects of trade activities and financial development on the economy and the environment. This paper focuses on the inter-relationship between growth-energy-finance nexus for the CPTPP members in the 1971–2020 period. While the energy-growth-environment nexus has been extensively investigated, the energy-growth-finance relationship has been largely ignored in existing literature, particularly for the CPTPP countries. Our findings can be summarized as follows. First, we find that renewable energy consumption does reduce CO(2) emission while financial development does not necessarily increase environmental degradation. Second, financial development is found to cause renewable energy usage bilaterally. Finally, when different proxies are used for financial development, a bilateral causality relationship between renewable energy usage, financial development and economic growth is confirmed. These important findings imply that the governments of the CPTPP countries should encourage renewable energy usage to achieve the dual objectives from the CPTPP trade agreement: (i) to increase trade activities; and (ii) to support further financial development within the region. These two objectives together support economic growth.
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spelling pubmed-92028812022-06-17 Economic growth, renewable energy and financial development in the CPTPP countries Vo, Duc Hong Tran, Quan Tran, Thao PLoS One Research Article The trade agreement is generally considered an effective mechanism to encourage trading activities. However, trade activities may lead to environmental degradation because more trade is generally associated with more energy consumption. In addition, financial development with an increased flow of capital among members is required to fund trading activities. Renewable energy can be a moderating factor to balance the effects of trade activities and financial development on the economy and the environment. This paper focuses on the inter-relationship between growth-energy-finance nexus for the CPTPP members in the 1971–2020 period. While the energy-growth-environment nexus has been extensively investigated, the energy-growth-finance relationship has been largely ignored in existing literature, particularly for the CPTPP countries. Our findings can be summarized as follows. First, we find that renewable energy consumption does reduce CO(2) emission while financial development does not necessarily increase environmental degradation. Second, financial development is found to cause renewable energy usage bilaterally. Finally, when different proxies are used for financial development, a bilateral causality relationship between renewable energy usage, financial development and economic growth is confirmed. These important findings imply that the governments of the CPTPP countries should encourage renewable energy usage to achieve the dual objectives from the CPTPP trade agreement: (i) to increase trade activities; and (ii) to support further financial development within the region. These two objectives together support economic growth. Public Library of Science 2022-06-16 /pmc/articles/PMC9202881/ /pubmed/35709183 http://dx.doi.org/10.1371/journal.pone.0268631 Text en © 2022 Vo et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Vo, Duc Hong
Tran, Quan
Tran, Thao
Economic growth, renewable energy and financial development in the CPTPP countries
title Economic growth, renewable energy and financial development in the CPTPP countries
title_full Economic growth, renewable energy and financial development in the CPTPP countries
title_fullStr Economic growth, renewable energy and financial development in the CPTPP countries
title_full_unstemmed Economic growth, renewable energy and financial development in the CPTPP countries
title_short Economic growth, renewable energy and financial development in the CPTPP countries
title_sort economic growth, renewable energy and financial development in the cptpp countries
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9202881/
https://www.ncbi.nlm.nih.gov/pubmed/35709183
http://dx.doi.org/10.1371/journal.pone.0268631
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