The dynamic impacts of financial development and human capital on CO2 emission intensity in China: an ARDL approach

    Peng Li Affiliation
    ; Yaofu Ouyang Affiliation


This paper studies the dynamic impacts of financial development, human capital, and economic growth on CO2 emission intensity in China for the period 1978–2015, with a structural breakpoint in 1992, by employing an autoregressive distributed lag (ARDL) approach. The estimations show that there exists a long-run cointegration linkage among the variables, with three main findings. First, financial openness measured by net FDI inflows can significantly reduce CO2 emission intensity in both the short-term and the long-term, whereas the effects of both financial scale and financial efficiency are limited and insignificant. Second, there exists an inverted N-shaped relationship between human capital and CO2 emission intensity: improving human capital first decreases CO2 emission intensity (before 1992), then increases it in the short-run (after 1992), and, finally, lessens it in the long-run. Last, raising per capita income can also significantly lower CO2 emission intensity in the long-run. Accordingly, some policy implications are also discussed.

Keyword : CO2 emission intensity, financial development, human capital, economic growth, ARDL, China

How to Cite
Li, P., & Ouyang, Y. (2019). The dynamic impacts of financial development and human capital on CO2 emission intensity in China: an ARDL approach. Journal of Business Economics and Management, 20(5), 939-957.
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Aug 6, 2019
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