Globalization, Financial Development, and Environmental Degradation in the Presence of Environmental Kuznets Curve: Evidence from ASEAN-5 Countries

ASEAN is regarded as an economically dynamic region with notable policies towards economic openness, implying the encouragement of globalization and trade liberalization. Considerable globalization and financial development processes, together with the incremental energy demand, necessitated the issue of controlling environmental damage. The main objective of this research is to evaluate the impacts of globalization and financial development, incorporating energy consumption, urbanization and GDP per capita, on carbon dioxide emissions with the presence of Environmental Kuznets Curve (EKC) model for selected ASEAN countries. From the author's best knowledge and review of literature, there has been no study that only focuses on ASEAN region, and this paper serves as the first one in the discipline. This research approaches the heterogeneity in the panel data over the 1971-2014 period by utilizing the fixed and random effects regression models. The author uses the tests based on Durbin–Hausman–Wu statistic to determine the appropriate models. The findings indicate that (i) financial development, energy consumption and urbanization boost the carbon dioxide emissions; (ii) globalization as an aggregate measure significantly increases carbon dioxide emissions and the effect mainly comes from the economic globalization facet; (iii) the EKC hypothesis is underpinned in ASEAN-5 countries. Hence, this suggests crucial implications for policy-makers. Keywords: Globalization, Financial development, Carbon dioxide emission JEL Classifications: F64, O44, Q56 DOI: https://doi.org/10.32479/ijeep.729