EXPLORING THE LINK AMONG FINANCIAL INCLUSION, ECONOMIC GROWTH, TAX REVENUE AND ENVIRONMENTAL DEGRADATION IN DEVELOPING COUNTRIES: A STUDY ALIGNED WITH SDG 8 AND 13

Abstract

This study examines the link among financial inclusion, economic growth, tax revenue and CO2 emission in 87 developing countries. Secondary data has been used for the analysis over 2005 to 2020. CO2 emission is used as dependent variable while, financial inclusion, economic growth and tax revenue is using as explanatory variables. Labore force participations and foreign direct investment are used as control variable. Novelty of the study is to consider combined impact of productions, service and consumption-based factors. This study has been uses descriptive statistics, correlation matric and fixed affect model to analyze the data.  The results of descriptive statistics show the intertemporal properties of the data which shows that data is normally distributed and there is no outlier in the data. Correlation matrix shows that there is no multicollinearity issue in data. Results of Hausman test shows that fixed effect model is most appropriate for the analysis rather than random effect model. Results of fixed effect model shows that financial inclusion, economic growth, tax revenue and foreign direct investment has positive and significant impact on CO2 emission except economic growth while, labore force participation has negative impact on CO2 emission. Which shows that developing countries should focus on improvement of environmental sustainability awareness to the individuals and industrialists as well so that the environmental degradation should be controlled. It is also important for the developing countries to develop and implement the policies and standard environmental standard which are very helpful to control the environmental degradation.