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Open AccessArticle

Financial Development and CO2 Emissions in Post-Transition European Union Countries

1
Department of Economics, Faculty of Economics and Administrative Sciences, Usak University, Usak, Turkey
2
Department of Economics and International Relations, Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, Carol I Avenue, no. 22, Iasi, Romania
3
Department of Marketing, Management and Business Administration, Faculty of Economics and Business Administration, “Alexandru Ioan Cuza” University of Iasi, Carol I Avenue, no. 22, Iasi, Romania
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(7), 2640; https://doi.org/10.3390/su12072640 (registering DOI)
Received: 19 February 2020 / Revised: 6 March 2020 / Accepted: 16 March 2020 / Published: 26 March 2020
(This article belongs to the Special Issue Energy Consumption and Financial Development)
Carbon dioxide emissions are on the rise, posing a serious global issue. Therefore, it is important that policymakers identify the exact causes of these emissions. This paper investigates the influence of financial development, primary energy consumption, and economic growth on CO2 emissions in 11 post-transition European economies. The assessment was made for the 1995–2017 period using panel cointegration and causality analyses. The causality analyses did not reveal significant connection between financial sector development and CO2 emissions, but rather a two-way causality between primary energy consumption and economic growth, on one hand, and CO2 emissions on the other. Meanwhile, long-run analysis disclosed that financial sector development and primary energy consumption positively affected CO2 emissions. Our results seek to grab the attention of policy makers, who could work towards creating country-specific strategies that balance the relationship between financial development and CO2 emissions. These long-term policies could ensure both development of the financial sector and environmental protection.
Keywords: financial development; energy consumption; economic growth; CO2 emissions; panel data analysis financial development; energy consumption; economic growth; CO2 emissions; panel data analysis
MDPI and ACS Style

Bayar, Y.; Diaconu (Maxim), L.; Maxim, A. Financial Development and CO2 Emissions in Post-Transition European Union Countries. Sustainability 2020, 12, 2640.

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