THE ENVIRONMENTAL EFFECTS OF FINANCIAL MARKET DEVELOPMENT IN EAST ASIAN AND SOUTHEAST ASIAN COUNTRIES
Shanty Oktavilia1, Indah Fajarini Sri Wahyuningrum1, Andryan Setyadharma1, Erma1 Firmansyah2
1) Universitas Negeri Semarang
2) Diponegoro University
Abstract
This study aims to examine the effect of financial market development, investment, and trade openness on the environmental quality of East Asian and Southeast Asian countries from 1991-2017. Differences in the influence of the East and Southeast Asian region on environmental quality indicators are accommodated by using the dummy variable of the region. All data is sourced from World Development Indicators - World Bank. The results of this study reinforce the notion that per capita income (GDPCap), the environmental effects of financial market development (FMDev), foreign direct investment (FDI), and trade openness (TL), influence according to the hypothesis. The Empirical Kuznet Curve (EKC) hypothesis was empirically proven in both regions. Capital inflows and trade openness negatively affect environmental quality, while financial market development (FMDev) has a positive effect on environmental quality in both regions.
Keywords: Financial Market Development, Environment, Trade, EKC
Topic: Sustainable Development