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Global warming has become one of the most serious world-challenging issues nowadays, and much effort is being done to combat its consequences. Therefore, studying the trade-off between carbon emissions and economic activity remains an attractive subject for researchers. In this study, the environmental Kuznets curve (EKC) hypothesis is adopted to verify the trade-off between carbon dioxide emissions per capita and labor productivity in the top 40 emitter countries. Accordingly, a panel data from the top 40 emitter countries is employed from 1992 to 2018, and the novel method of moments quantile regression (MMQREG) is used to analyze the nexus among the variables. In addition, four robustness tests were used to validate the initial results. The findings reveal evidence for the N-shape EKC in the top 40 emitter countries. This indicates that economic growth initially will improve environmental quality up to a certain labor productivity level. However, after reaching a certain turning point, per capita CO2 emission began to fall with rising labor productivity up to the second tipping point, and then, a subsequent phase of deterioration. Heterogeneous characteristics are, however, detected over the N-shape EKC. Like the conclusion reached from the MMQREG, the pooled ordinary least squares (POLS), the fixed-effects (FE), the random-effects (RE), and the fully modified ordinary least squares (FMOLS) all confirmed the existence of the N-shape hypothesis.

This study investigates the relationship between trade openness, financial development and economic growth for the Kingdom of Bahrain. Time series data are utilized form 1980 till 2012. The vector error correction model (VECM) in combination with innovation of accounting (variance decomposition and impulse response function) analysis are employed to explore the causal relationship between the variables. The stationarity properties of the data and the order of integration are tested using both the Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP) test. All variables are found to be cointegrated indicating the existence of long-run relationship. The empirical findings show that trade openness and financial development have causal impact on economic growth. Conversely, growth is found to have no causal impact on trade and financial development, implying support for “trade-led growth” and “finance-led growth” hypotheses. Furthermore, the results show a short-run causality from financial development to trade openness. The findings suggest that trade openness and financial development are important elements in determining economic growth in Bahrain. Therefore, Bahrain should continue to patronize the development of its financial sector and to allow more trade openness in order to achieve a high and sustainable economic growth.