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The relevance of economic freedom for energy, environment, and economic growth in Asia-Pacific region

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Abstract

This paper investigates the relationship between energy intensity, economic freedom, and carbon emissions. The problem of environmental degradation, economic freedom, and energy use is mainly studied for developed economies; however, this study has selected forty-one Asia-Pacific economies representing all income groups of the World Bank’s classification. In the presence of income, economic freedom plays a dual role for environment and energy: direct impact and as moderating factor impact. Here, we empirically test for a panel of 41 Asia-Pacific countries using the autoregressive distributed lag approach. Our findings suggest, although there is no bidirectional causality between all the variables, the long-run estimates of economic freedom for economy and environment are positive. The results imply for substantial structural reforms with a favorable economic and regulatory environment for Asia-Pacific countries. Our empirical analysis also implies that GDP growth levels for Asia-Pacific countries are becoming increasingly dependent on economic freedom and energy intensity. The results underline the critical role played directly and indirectly by economic freedom in creating an atmosphere that promotes research and development activities to help reduce energy intensity shortly to solve environmental problems.

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Notes

  1. However, further tested through panel unit root, discussed below in the “Results and discussion” section, we conclude the mixed order of integrations as a possible case for ARDL methodology.

  2. This index also includes property rights and other factors of rule of law, so we have not used these factors directly for analysis.

  3. This is anticipated inefficiency generated by pollution.

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Authors and Affiliations

  1. Department of Economics, Federal Urdu University of Arts Science and Technology, Islamabad, Pakistan

    Muhammad Tariq Mahmood & Sadaf Shahab

  2. Beijing Institute of Technology, Beijing, People’s Republic of China

    Muhammad Shahbaz

Authors
  1. Muhammad Tariq Mahmood
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  2. Sadaf Shahab
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  3. Muhammad Shahbaz
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Contributions

Conceptualization, MS and MT; methodology, MT and SS; formal analysis, MT and SS; investigation, MS; writing (original draft preparation), MT and SS; and writing (review and editing), MS and MT.

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Correspondence to Muhammad Tariq Mahmood.

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The authors declare no competing interests.

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Responsible editor: Nicholas Apergis

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Appendix

Appendix

Descriptive stats

Table 7. Summary statistics all series (non-log)
Full size table
Table 8. ANOVA and equality tests
Full size table

List of countries (41)

United Arab Emirates, Australia, Bangladesh, Bahrain, Brunei Darussalam, China, Cyprus, Georgia, Hong Kong, Indonesia, India, Iran, Israel, Jordan, Japan, Kazakhstan, Kyrgyz Republic, Cambodia, South Korea, Kuwait, Lebanon, Sri Lanka, Myanmar, Mongolia, Malaysia, Nepal, New Zealand, Oman, Pakistan, Philippines, Qatar, Russia, Saudi Arabia, Singapore, Thailand, Tajikistan, Turkmenistan, Turkey, Uzbekistan, Vietnam, Yemen.

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Mahmood, M.T., Shahab, S. & Shahbaz, M. The relevance of economic freedom for energy, environment, and economic growth in Asia-Pacific region. Environ Sci Pollut Res 29, 5396–5405 (2022). https://doi.org/10.1007/s11356-021-15991-z

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  • DOI: https://doi.org/10.1007/s11356-021-15991-z

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