RESEARCH ARTICLE
Political risk and environmental quality in Brazil: Role of green finance and green innovation
Dervis Kirikkaleli,
Tomiwa Sunday Adebayo,
Corresponding Author
Dervis Kirikkaleli
Faculty of Economics and Administrative Sciences, European University of Lefke, Mersin, Turkey
Correspondence
Dervis Kirikkaleli, Faculty of Economics and Administrative Sciences, European University of Lefke, Northern Cyprus, Mersin 10, Turkey.
Email: [email protected]
Search for more papers by this authorTomiwa Sunday Adebayo
Faculty of Economics and Administrative Sciences, Department of Economics, Cyprus International University, Mersin, Turkey
Search for more papers by this authorDervis Kirikkaleli,
Tomiwa Sunday Adebayo,
Corresponding Author
Dervis Kirikkaleli
Faculty of Economics and Administrative Sciences, European University of Lefke, Mersin, Turkey
Correspondence
Dervis Kirikkaleli, Faculty of Economics and Administrative Sciences, European University of Lefke, Northern Cyprus, Mersin 10, Turkey.
Email: [email protected]
Search for more papers by this authorTomiwa Sunday Adebayo
Faculty of Economics and Administrative Sciences, Department of Economics, Cyprus International University, Mersin, Turkey
Search for more papers by this authorAbstract
The quest for ecological sustainability while reducing the impacts of environmental deterioration has become a worldwide endeavour. Furthermore, it is unclear how developing economies such as Brazil can considerably improve environmental quality (EQ). This paper contributes to the ongoing literature by evaluating the effect of green finance, economic growth, political risk, social globalization and green innovation on environmental quality in Brazil. The study used data spanning between 2000Q1 and 2018Q4. Unlike other investigations, the current study used load capacity factor as a proxy for environmental quality, which considers both demand and supply sides of environmental issues. The current study applied the novel dynamic ARDL to capture the short and long-run nexus. The bootstrap causality test was also applied to capture causal connection instabilities over time. The results of this study are as follows: (1) a significant and positive association was found between political risk, green finance, green innovation and social globalization environmental quality; (2) a significant and negative interplay was detected between economic growth and environmental quality; (3) The time-varying causality shows a feedback causality at various periods between political risk, green finance, green innovation, economic growth, social globalization and environmental quality. This study also serves as a reference point for governments and policymakers in terms of investing in eco-friendly technologies in order to improve environmental quality.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are openly available in World Bank (https://databank.worldbank.org).
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