Abstract
The present study aims to investigate the impact of remittances on CO2 emission by incorporating financial development, economic growth, industry value added, and agriculture value added in it. This research covers the 37 years of panel data of five countries, i.e., India, the Philippines, Egypt, Pakistan, and Bangladesh, from 1980 to 2016. The data were collected from the World Bank database. The panel cointegration technique and panel autoregressive distributive lag (ARDL) model have been employed to check long-run relationships. The estimated result of the panel cointegration approach confirms the existence of a long-run relationship among remittances received, financial development, economic growth, industry value added, agriculture value added, and CO2 emission. The findings of the study indicate that an increase in received remittances, economic growth, and value-added agriculture help in mitigating carbon emissions from the selected panel countries. However, improving the financial system and adding more industries result in the high emission of CO2. On the contrary, the short-run ARDL estimation shows that CO2 emission increases at a significant level with the increase of remittances inflow and agriculture value added, while in the case of financial development, economic growth, and industry value added, this increasing effect in CO2 is at an insignificant level. Moreover, dynamic ordinary least square (DOLS) is used in this study for robust analysis and found the same long run result like ARDL. Additionally, this study also provides some important recommendations to economic policymakers to reduce CO2 emission in the selected remittance-receiving countries.