Analyzing CO2 Emissions Effect of Financial Development while Accounting for Common Factors in the GCC. Is the Effect Asymmetric?

Analyzing CO2 Emissions Effect of Financial Development while Accounting for Common Factors in the GCC. Is the Effect Asymmetric? | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Analyzing CO2 Emissions Effect of Financial Development while Accounting for Common Factors in the GCC. Is the Effect Asymmetric? Fakhri J. Hasanov, Sa’d Shannak, Shahriyar Mukhtarov, Elchin Suleymanov This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-3559067/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Ignoring common factors can lead to erroneous findings and misleading policy recommendations, according to panel time-series literature. The same consequences occur if the nature of a factor’s effects is incorrectly considered. We investigated CO2 emission effects of financial development (FD) alongside income and international trade in Gulf Cooperation Council (GCC) countries. The Asymmetric Pooled Mean Group augmented with common unobserved factors - a cutting-edge method allowing to discover not only the features of the pooled panel but also the characteristics of each country - was applied to data for 1992–2021. There is no such application for GCC countries, and only one internationally to our knowledge. We show that accounting for factors common to GCC countries is important, as ignoring them makes the CO2 emissions effects of FD flawed. The effects are asymmetric: upturn of FD leads to lower emissions than its downturn. Another key finding is that CO2 emissions in GCC countries may converge to an identical relationship. In designing CO2 emissions mitigation policies, the following points should be considered: directing financial resources toward eco-friendly technologies, energy transitions, and sectors; accounting for global and regional common factors; close cooperation across the region countries due to common factors and convergence. GCC Consumption-based CO2 Financial development Asymmetric PMG Common unobserved factors Cointegration Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-3559067","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":246266464,"identity":"1793dfb7-47f0-4ce7-b8e2-ca31d7c2089e","order_by":0,"name":"Fakhri J. 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