AUTHOR=Huang Yongming , Xu Fan , Abbas Ali , Cong Phan The , Zhang Yuanwei , Kim Euijune TITLE=Empirical impact of China-Pak business cycle synchronization on environmental degradation in Pakistan JOURNAL=Frontiers in Environmental Science VOLUME=10 YEAR=2023 URL=https://www.frontiersin.org/journals/environmental-science/articles/10.3389/fenvs.2022.1030408 DOI=10.3389/fenvs.2022.1030408 ISSN=2296-665X ABSTRACT=

This study investigates the empirical impact of China-Pak business cycle synchronization, urbanization, foreign direct investment, exports, and imports on environmental degradation in Pakistan from 1975 to 2017. In doing so, we use the Hodrick-Prescott filter to obtain the trend component of GDP. Then the trend component is subtracted from the original series of GDP to capture the cyclical component of China and Pakistan. The business cycle synchronization index is used to estimate synchronization between the business cycles of both countries. Using the ARDL method, we investigate the existence of a long-run co-integration relationship between the variables of interest. The empirical findings indicate that all explanatory variables (except FDI) are found to be significant factors of environmental degradation in the model. Furthermore, both imports and urbanization have a positive and significant impact on environmental degradation in Pakistan. At the same time, China-Pak business cycle synchronization and exports are discovered to have negative and significant coefficients for environmental degradation in Pakistan. The negative and significant ECM value indicates model convergence and a short-run relationship. The findings of the study suggest that improvement in China-Pak business cycle synchronization may be a factor that promotes environmental sustainability in Pakistan. An increase in exports and a decrease in imports can significantly contribute to reducing environmental degradation in Pakistan. A favorable balance of payment can provide sufficient financial prosperity to take environmental preservation measures. Policymakers should create effective urban planning, which has the potential to improve the country’s environmental quality.