Financial development, market freedom, political stability, economic growth and CO2 emissions: An unexplored nexus in ASEAN countries

The prime objective of the current study is to explore the nexus among financial development, market freedom, political stability, economic growth and CO2 emissions in ASEAN countries. The present study has attempted to examine the asymmetric association among financial development, CO2 emissions, and economic growth. The data for the variables are obtained from the World Bank. The CO2 emission is measured in kilotons. The Johansen cointegration technique has been used for analyzing the long-term association. The results of the political freedom model indicate that in countries where there will be political stability, their CO2 emission will be low. A number of research papers have investigated the relationship between the environment and political freedom. A positive relationship has been found by most of the studies; however, these studies have not taken CO2 emissions into account. The probability of making agreements at international conferences is directly linked with the political freedom to lower the level of global pollutants. This study proves that the implementation of such agreements has started recently and a significant impact of political freedom on emissions cannot yet be finalized with the limited data available. Financial development appears to have a significant relationship with carbon emission. This study will be helpful for policymakers and researchers in understanding the issues related to financial development, market freedom, political stability, and economic growth and CO2 emissions in ASEAN countries.