Keywords : Panel ARDL

Crude Oil Price, Urbanization and Environmental Pollution: Fresh Evidence from Selected African OPEC Member Countries

Kabiru Saidu Musa; Rabiu Maijama’a

Marketing and Branding Research, 2020, Volume 7, Issue 1, Pages 47-61
DOI: 10.33844/mbr.2020.60324

The paper investigates the effect of crude oil price and urbanization on the environmental pollution in the case of six selected OPEC African member countries for the 1986-2018 period and applied panel ARDL model. Finding from PMG model indicates that crude oil price, urbanization and foreign direct investment have a significant negative influence on environmental pollution in the long-run while in the short-run, urbanization has a significant negative impact on environmental pollution but all the remaining variables have a significant positive impact on environmental pollution. There was slow speed of adjustment from short-run disequilibrium to equilibrium position at 26 percent yearly. The Pairwise Dumitrescu Hurlin panel causality test revealed the existence of bilateral causality flowing from urbanization to environmental pollution, economic growth to environmental pollution, economic growth to crude oil price and economic growth to urbanization. While unidirectional causality exists flowing from crude oil price to environmental pollution and foreign direct investment to economic growth. As a recommendation for these countries to achieve and maintain quality environment, the nations must restrict the speed of urbanization process to its optimum level and this process will decrease the environmental effects associated with it. The existence of exertions regarding development and urbanization, now it is the right time for the governments of these countries to produce and stretch plan that will continue to concentrate on exploration of crude oil, since the increasing crude oil price from the global energy market exerts positive effect on the entire revenue generated by these economies.