Quantile relationship between globalization, financial development, economic growth, and carbon emissions: evidence...

Environmental quality and economic activity have a strong relationship. Carbon emissions remain one of the world's most dangerous environmental issues. Both international and local governments are developing initiatives to address this problem. Capitalizing on the limitations of the existing literature, this article investigates the dynamic nexus of financial development, economic growth, and globalization on carbon dioxide emissions in Vietnam for 1990-2020 using the quantile-on-quantile regression. The findings unveil a positive feedback link between globalization and carbon dioxide emissions at the middle and high quantiles. In addition, there is a negative nexus between financial development and carbon emissions at most quantiles, while CO₂ emissions and economic growth have a positive association at all quantiles. More importantly, our empirical results also provide the bidirectional causality between financial development, economic growth, globalization, and carbon dioxide emissions in Vietnam at different quantile levels. The consistency of the outcomes uncovers that the findings are trustworthy and appropriate for guiding policy to reduce CO₂ emissions in Vietnam. Therefore, they can help policymakers understand how financial development and globalization can achieve sustainable economic growth and tackle environmental issues in this country.