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Global crises have heightened policy uncertainties and efforts to address global climate change. Limited evidence exists in the literature on geopolitical risk's direct and indirect roles in addressing global emissions. In this study, we examine whether geopolitical risk could impede or facilitate efforts to attain a net‐zero emissions target through energy transition using panel data for 42 countries from 1990 to 2020. Various econometric techniques were applied in this study to present robust findings and reliable conclusions. Estimates from the Driscoll‐Kraay, Lewbel two‐stage least squares and method of moment regression techniques consistently showed that countries' geopolitical risk directly increases emissions (total greenhouse gas, carbon, methane, and nitrous oxide). At the same time, energy transition, measured with renewable energy consumption, mitigates these emissions. In addition, evidence from the partial linear functional‐coefficient model technique indicates that renewable energy consumption consistently mitigates emissions when geopolitical is minimal (at a minimum and mean level). However, the role of renewable energy consumption in reducing emissions becomes weaker when geopolitical risk is heightened—thus, when geopolitical risk reaches its maximum level. We recommend that efforts to sustain renewable energy transition and maintain geopolitical stability are vital for achieving net‐zero emissions and climate change mitigation. [ABSTRACT FROM AUTHOR]

We augment the existing knowledge on the role of economic complexity in the environment and sustainable development debate by examining the effect of economic complexity on environmental degradation (measured by ecological footprint, CO2 emissions, N2O emissions and greenhouse gas emissions) contingent on income, using data from 35 OECD countries between 1998 and 2017. With the fixed effects model estimator, we find that income facilitates economic complexity to mitigate ecological footprint, CO2 emissions, N2O emissions and greenhouse gas emissions. Also, we fit a partial linear functional‐coefficient model to find that income influences economic complexity to exert a nonlinear effect on ecological footprint, CO2 emissions, N2O emissions and greenhouse gas emissions. We find that economic complexity leads to an increase in ecological footprint, CO2 emissions, N2O emissions and greenhouse gas emissions at lower income levels but gradually dampens them as income rises. Finally, by applying the Method of Moments Quantile regression to control for distributional heterogeneity, we also find that the mitigating effect of economic complexity on ecological footprint, CO2 emissions, N2O emissions and greenhouse gas emissions is transmitted through income across quantiles. The policy implications are discussed. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) provides many African countries an important source of capital inflow. Despite notable improvements in these capital‐scarce countries' economic, political and social conditions, foreign investors have not considered them viable host locations. Since FDI brings enormous spillovers to its host, some countries have recently institutionalized globalization as the catalyst for reversing the trend. Against this backdrop, we examine the FDI‐globalization nexus across 47 African countries for the 1996–2016 period. Using the augmented mean group estimator, the results suggest that FDI in Africa is indeed globalization‐induced. Moreover, we find this positive nexus to be driven by the economic dimension of globalization. Overall, we demonstrate the potential of globalization in stimulating an FDI boom in Africa. [ABSTRACT FROM AUTHOR]

The need to reduce environmental degradation has led to the identification of several factors influencing environmental degradation, with the inflows of foreign direct investments (FDI) touted as a key factor. However, findings produced from the existing studies on FDI‐environmental degradation nexus are far from being conclusive, leaving policymakers under quandary regarding the precise effect of FDI on environmental degradation. We contribute to the FDI‐environmental degradation nexus debate by examining how economic development and globalization thresholds influences the role of FDI in environmental degradation in industrialized countries over the 1991–2016 period. We invoke a recently developed fixed effect panel threshold model estimation procedure that does not impose a prior functional form of the threshold. We find that FDI inflows mitigate environmental degradation when countries' levels of economic development and globalization are below the estimated thresholds. However, above the thresholds, higher FDI inflows significantly degrade the environment. Thus, unbridled economic development and globalization do not permit FDI to reduce environmental degradation. [ABSTRACT FROM AUTHOR]

This article examines the developer's dilemma—a seeming quandary emerging from the fact that developing countries simultaneously pursue two different developmental goals: (a) seeking economic development through structural transformation and (b) reducing income inequality. However, the proclivity of increasing income inequality while pursuing structural transformation is often referred to as the developer's dilemma. This study investigates for the presence of this dilemma in Africa using sample splitting and threshold estimation technique. While we find support for the existence of a developer's dilemma, suggesting that structural transformation induces income inequality, the income inequality‐widening effect is disproportionate. [ABSTRACT FROM AUTHOR]

Earlier studies on institutions and financial sector development are less informative given their failure to examine how the different forms of institutions influence countries' level of domestic financial development. In this study, we re-examine the impact of institutions on financial development in the ECOWAS regional bloc over the period 1995–2015. Employing the Augmented Mean Group (AMG) estimator, we show that overall institutions do not have a significant impact on financial development. However, after disaggregating the level of institutions into market-creating, market-legitimizing, market-stabilizing, and market-regulating, we find that only the effect of market-legitimizing institutions significantly enhances financial sector development. Thus, the impact of institutions on financial development is sensitive to the form of institutions. We discuss key implications for policy. [ABSTRACT FROM AUTHOR]

We pioneer empirical investigation into the causal relationship between foreign direct investment (FDI) and globalization in Africa with the aid of the Dumitresu-Hurlin panel Granger causality test. Using a panel dataset of 50 countries for the period 1996–2016, we find evidence of unidirectional causality from globalization to FDI. Considering the dimensions of globalization, we find evidence of unidirectional causality from social and political globalization to FDI while, in the case of economic globalization, the direction of causality moves from FDI. However, at the country level, there are substantial variations in terms of the causal relations. Thus, making policies regarding FDI–globalization should be treated with caution as one–size–does–not–fit all given the differential causal nexuses in Africa. [ABSTRACT FROM AUTHOR]

We examine the impact of macroeconomic factors on stock market development in sub-Saharan Africa. More specifically, we examine the sensitivity of the impact of macroeconomic factors on stock market development to the choice of measure of stock market development. We apply the Feasible Generalised Least Squares (FGLS) estimator on a panel dataset of 12 countries over the period 2000–2015. The empirical results indicate that income, trade openness, financial openness, macroeconomic instability, financial intermediary development, savings, and investment influence stock market development. We provide evidence to suggest that the impact of macroeconomic factors on stock market development is sensitive to the choice of measure of stock market development. The implication of our findings is that the multidimensionality of stock market development should not be jettisoned in making policy prescriptions for stock market development in sub-Saharan Africa. [ABSTRACT FROM AUTHOR]