Politická ekonomie 2023, 71(6):730-757 | DOI: 10.18267/j.polek.1405

Combining Economic Growth and Financial Development in Environment-Health Nexus

Han Dongping ORCID...a, Mansoor Ahmed Golo ORCID...a, Qamaruddin Maharb, Syed Safdar Ali Shah ORCID...b, Maysa Kadyrova ORCID...c
a School of Management, Harbin Institute of Technology, Harbin, China
b Faculty of Business Education Social Sciences and Humanities Isra University, Hyderabad, Pakistan
c School of Management, Shanghai University, Shanghai, China

This study examines the impact of monetary developments on environmental quality and economic growth. We utilize ARDL/PMG models to study twelve climatically vulnerable countries from 1996 to 2018. We find that a 1% increase in real GDP and domestic credit harms the environment by 0.827% and 0.220%, respectively. However, savings improve environmental excellence by 0.373%. A 1% environmental degradation decreases human health by 0.317%; consequently, economic growth declines by 1.102%. Good governance emerges as a key solution, with a 1% improvement in public institutions mitigating the adverse impact of real GDP on the environment by 0.777%. Redirecting 1% of loans to eco-friendly projects improves the environment by 1.311%. Dumitrescu-Hurlin and PVAR Granger tests support these findings.

Keywords: Environmental degradation index, human health index, PCA technique, panel ARDL method, good governance, high-risk countries
JEL classification: C33, O44, Q51

Received: February 24, 2023; Revised: June 1, 2023; Accepted: July 10, 2023; Prepublished online: November 23, 2023; Published: December 19, 2023  Show citation

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Dongping, H., Golo, M.A., Mahar, Q., Safdar Ali Shah, S., & Kadyrova, M. (2023). Combining Economic Growth and Financial Development in Environment-Health Nexus. Politická ekonomie, 71(6), 730-757. doi: 10.18267/j.polek.1405
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