Impact of Globalisation and Energy Consumption on CO2 Emissions: Empirical Evidence from Lithuania Using Linear and Non-linear ARDL Bound Testing Approach

Abstract

This study examines the symmetric and asymmetric impact of globalisation and energy consumption on Lithuania's carbon dioxide (CO₂) emissions using the KOF index of globalisation. Interestingly, the KOF database applies several globalisation gauges, including financial, trade, and overall globalisation. This study employs a series of econometrics techniques using data from 1988 to 2018. The results of the linear and non-linear Autoregressive Distributed Lag (ARDL) bounds testing approach reveal substantial evidence of a long-run association between the study variables. The OLS estimates of the non-linear ARDL model explain that the positive shock in financial globalisation deteriorates CO₂ emissions. I could not find such evidence for trade globalisation and overall globalisation. Conversely, energy consumption is the primary source of CO₂ emissions in Lithuania.