Does the inflow of remittances cause environmental degradation? Empirical evidence from China

• Published in: Economic research - Ekonomska istraživanja Vol. 32; no. 1; pp. 2099 - 2121
• Main Authors: Ahmad, Manzoor, Ul Haq, Zahoor, Khan, Zeeshan, Khattak, Shoukat Iqbal, Ur Rahman, Zia, Khan, Shehzad
• Format: Journal Article Paper
• Language: English
• Published: Pula Routledge 2019; Taylor & Francis Ltd; Taylor and Francis Group i Sveučilište Jurja Dobrile u Puli, Fakultet ekonomije i turizma Dr. Mijo Mirković
• Subjects: Asymmetry; Carbon dioxide; CO2 emissions; Cointegration analysis; Economic theory; Economic welfare; Environmental degradation; Environmental impact; Multiplier; NARDL modeling dynamic multiplier; negative shocks; Policy making; positive shocks; Remittances; Time series; China
• ISSN: 1331-677X; 1848-9664
• DOI: 10.1080/1331677X.2019.1642783

Remittances inflow plays a significant role in promoting the economic welfare of a country; it has a multidimensional effect on the economy and links with the carbon emissions. This study examines the possible asymmetric transmissions from remittances to carbon dioxide emissions (CO2) in China using time series data from 1980 to 2014. The Non-linear NARDL method is employed to check the longrun asymmetric relationship between remittances inflow and carbon emissions. The findings show that a positive shock in remittances causes an increase in CO2 emissions, while a negative shock in remittances causes a decrease in CO2 emissions. The results support the existence of an asymmetric cointegrating relationship between remittances and CO2 emissions in both short run and the long run. The NARDL dynamic multiplier graph assumes that positive remittances shocks are highe compared to the negative remittances shocks. It suggests that policymakers in China should consider remittances as a policy instrument especially designing strategies and policies related to sustainable environmental quality in the long run.