Environmental impact of financial Market's development in Australia

Australia’s Financial Market Development and the Environment

Key finding of the study

Market-based financial development improves long-term environmental quality while the short-run impact opposes the long-run outcome in Australia.

Authors

A.W.G.C.N. Wijethunga, School of Business, University of Southern Queensland, West Street, Toowoomba, Australia

M.M. Rahman, School of Business, University of Southern Queensland, West Street, Toowoomba, Australia

T. Sarker, School of Business, University of Southern Queensland, Springfield Education City, 37 Sinnathamby Blvd, Springfield Central, Ipswich, Australia

Summary

This study investigates the impact of financial market development on environmental quality in Australia, focusing on components such as market depth, access, efficiency, and stability. Using an ARDL model with data from 1983 to 2021, the findings reveal that while financial market development improves environmental quality in the long run by reducing greenhouse gas emissions, it has a negative short-run effect. These results underscore the need for policymakers to balance the short- and long-term environmental impacts of financial development when designing strategies to meet Australia’s environmental goals.

Published in

Environmental Science and Pollution Research

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