Export Diversification and Ecological Footprint: A Comparative Study on EKC Theory among Korea, Japan, and China

Hongbo Liu, Hanho Kim, Shuanglu Liang and Oh-Sang Kwon
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Hongbo Liu: School of Economics, Yunnan University, Kunming 650091, China
Hanho Kim: Department of Agricultural Economics and Rural Development, Research Institute of Agriculture and Life Science, Seoul National University, Seoul 08826, Korea
Shuanglu Liang: School of Economics, Yunnan University, Kunming 650091, China
Oh-Sang Kwon: Department of Agricultural Economics and Rural Development, Research Institute of Agriculture and Life Science, Seoul National University, Seoul 08826, Korea

Sustainability, 2018, vol. 10, issue 10, 1-12

Abstract: This study examines the Environmental Kuznets Curve (EKC) hypothesis by adopting a country’s ecological footprint as an indicator of environmental degradation in three East Asian countries: Japan, Korea, and China. During the development process, countries intend to balance between stabilizing export demand and maintaining sustainable economic improvement in the context of deteriorating global warming and climate change. The Environmental Kuznets Curve (henceforth, EKC) was originally developed to estimate the correlation between environment condition and economic development. In this paper, we started from the EKC model and adopted an Error Correction Methodology (henceforth, ECM) to estimate the EKC relationships in Japan, Korea (two developed countries), and China (a developing country) over the period of 1990 to 2013. Besides this, instead of only using Gross Domestic Product (henceforth, GDP), two subdivisions of trade diversification—export product diversification and export market diversification—are introduced as proxy variables for economic development in rectification of the EKC. The results demonstrate that both Korea and Japan satisfy the EKC theory by demonstrating an inverted U-shaped relationship between economic development and ecological footprint, while analysis based on data from China does not display the same tendency. For both export product diversification and market diversification, the more diversified the country’s export is, the bigger its ecological footprint. The policy implications of this econometric outcome are also discussed.

Keywords: Environmental Kuznets Curve; ecological footprint; Herfindahl–Hirshman Index (HHI); export product diversification; export market diversification; error correction model (ECM) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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