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Environmental science and pollution research international
Jan, 2021;28 (4): 4531-4548.

Trade-environment nexus in OIC countries: fresh insights from environmental Kuznets curve using GHG emissions and ecological footprint.

Sajid Ali, Zulkornain Yusop, Shivee Ranjanee Kaliappan, Lee Chin
Author Information
  1. Sajid Ali: School of Business and Economics, Universiti Putra, Seri kembangan, Malaysia. sajidali1136@gmail.com.
  2. Zulkornain Yusop: School of Business and Economics, Universiti Putra, Seri kembangan, Malaysia.
  3. Shivee Ranjanee Kaliappan: School of Business and Economics, Universiti Putra, Seri kembangan, Malaysia.
  4. Lee Chin: School of Business and Economics, Universiti Putra, Seri kembangan, Malaysia.
PMID: 32944853 DOI: 10.1007/s11356-020-10845-6

Abstract

Being closely correlated with income and economic growth, trade openness impacts the environmental quality through different means. The study analyzes the robustness of the environmental Kuznets curve (EKC) hypothesis in OIC countries by examining the extent to which trade openness influence environmental quality through different environmental indicators for the period 1991 to 2018. A new methodology dynamic common correlated effects (DCCE) is applied to resolve the issue of cross-sectional dependence (CSD). We have used greenhouse gas (GHG) emissions, carbon dioxide (CO), methane (CH) and nitrous oxide (NO) along with ecological footprint as indicators of environmental quality. Results of DCCE estimation identify a negative association of trade openness with CO, NO, and CH, while the positive relationship with the ecological footprint in overall OIC countries and higher income OIC countries. On the other hand, trade openness has a positive association with all environmental indicators in lower income OIC countries. Our findings confirm that inverted-U-shaped EKC exists in all groups of OIC countries when CO, CH, and ecological footprint are used as environmental indicators. However, a U-shaped EKC exists in overall OIC countries and lower income OIC countries when NO is used. Eventually, it is recommended that if OIC countries continue trade openness policies and energy sector reforms and maintain sustainable use of biocapacity; then, they will be able to combat environmental issues with the increase in income.

Keywords

Cross-sectional dependence (CSD) DCCE estimation Ecological footprint Environment Environmental Kuznets curve (EKC) GHG emissions Trade openness

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MeSH Term

Carbon Dioxide
Cross-Sectional Studies
Economic Development
Greenhouse Gases
Income

Chemicals

Greenhouse Gases
Carbon Dioxide
Journal Article

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