The mediating role of capital investment and financial sector in the energy-pollution discourse
Management of Environmental Quality
ISSN: 1477-7835
Article publication date: 8 September 2023
Issue publication date: 2 January 2024
Abstract
Purpose
The authors analyse the interactive influence of energy use, capital investment and finance on pollution in energy-dependent African countries.
Design/methodology/approach
The study analyses data from 5 selected energy-dependent African nations (i.e. Algeria, Egypt, Nigeria, Morocco and South Africa) between 1981 and 2020 using the fully modified ordinary least squares (FMOLS) approach.
Findings
The panel result reveals that capital investment and energy interaction and financial development and capital investment moderation reduce pollution in all the countries. However, for country-specific results, the interaction of investment and energy lowers emissions in Algeria, South Africa, Nigeria and Morocco but increases pollution in Egypt. Similarly, except for Egypt, financial development and capital investment interaction offset pollution in Algeria, Nigeria, South Africa and Morocco.
Research limitations/implications
The limitation of the study stems from the inability to extend the scope to cover the entire African region. However, the fact that the authors selected the most prominent African nations in the sample to enable us to set the template for other smaller nations to follow makes the study tenable in its present form.
Practical implications
Energy-dependent African countries should invest in eco-friendly machines, technologies and equipment to lower pollution vis-à-vis production expansion.
Originality/value
The present research is more expansive by combining the finance and capital investment channels in the quest for decarbonising emerging African nations. Moreover, this is a comparative study, unlike past studies that mainly deploy a one-size-fits-all approach.
Keywords
Acknowledgements
Funding: This research is funded by the University of Economics Ho Chi Minh City (UEH), Vietnam with Grant No. IBR_RF310.
Citation
Mesagan, E.P. and Vo, X.V. (2024), "The mediating role of capital investment and financial sector in the energy-pollution discourse", Management of Environmental Quality, Vol. 35 No. 1, pp. 1-17. https://doi.org/10.1108/MEQ-11-2022-0306
Publisher
:Emerald Publishing Limited
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