<p>The rapid increase in environmental pollution has created many complexities for human health and other sectors of the economy. Given that, we line up to explore the influence of pollution emissions (POE) and financial development (FD) on agricultural production (AGP). In addition, we look into the moderating role of FD in the node between POE and AGP. The data-driven examination was arranged on 40&#xa0;years of data (1980–2019) of South Asian countries. Based on an empirical suggestion of unit root and cointegration statistics, the research adopts a quantitative approach employing fully modified OLS (FMOLS) and dynamic least square (DOLS) models to estimate the coefficients associated with pollution POE, FD, and their interaction on AGP. The empirical findings infer an inverse impact of CO<sub>2</sub> emissions on AGP while a direct effect of financial development on AGP. Additionally, the empirical analysis confirms the moderating role of FD in alienating the adverse impacts of pollution emissions (measured with CO<sub>2</sub> emissions) on agricultural yield. By enhancing the fragility of yields and climate change effect, high POE can limit the production of the agriculture sector. However, the developed status of financial sector corroborates the availability of funds for purchasing pesticides and modern seeds and thus helps in managing the adverse effects of POE. This study yields a vital policy regarding the cooperation between the financial sector and the agricultural sector to mitigate the adverse effects of climate change and to enhance the overall productivity of the agricultural sector in the South Asia region. The current settings of analysis can be marked novel as it explores the moderating role of financial sector development in POE-AGP nexus.</p>

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Effect of pollution emissions on agricultural production: Does financial development moderates the relationship?

  • Mosab I. Tabash,
  • Umar Farooq,
  • Linda Nalini Daniel

摘要

The rapid increase in environmental pollution has created many complexities for human health and other sectors of the economy. Given that, we line up to explore the influence of pollution emissions (POE) and financial development (FD) on agricultural production (AGP). In addition, we look into the moderating role of FD in the node between POE and AGP. The data-driven examination was arranged on 40 years of data (1980–2019) of South Asian countries. Based on an empirical suggestion of unit root and cointegration statistics, the research adopts a quantitative approach employing fully modified OLS (FMOLS) and dynamic least square (DOLS) models to estimate the coefficients associated with pollution POE, FD, and their interaction on AGP. The empirical findings infer an inverse impact of CO2 emissions on AGP while a direct effect of financial development on AGP. Additionally, the empirical analysis confirms the moderating role of FD in alienating the adverse impacts of pollution emissions (measured with CO2 emissions) on agricultural yield. By enhancing the fragility of yields and climate change effect, high POE can limit the production of the agriculture sector. However, the developed status of financial sector corroborates the availability of funds for purchasing pesticides and modern seeds and thus helps in managing the adverse effects of POE. This study yields a vital policy regarding the cooperation between the financial sector and the agricultural sector to mitigate the adverse effects of climate change and to enhance the overall productivity of the agricultural sector in the South Asia region. The current settings of analysis can be marked novel as it explores the moderating role of financial sector development in POE-AGP nexus.