CO 2 Emissions Embodied in International Trade and Economic Growth: Empirical Evidence for OECD and Non-OECD Countries

Hyunsoo Kang
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Hyunsoo Kang: Department of International Trade, Wonkwang University, Iksan 54538, Korea

Sustainability, 2021, vol. 13, issue 21, 1-20

Abstract: This study examined the relationship between CO 2 emissions embodied in international trade and economic growth for OECD and non-OECD countries between 2005 and 2015. Unlike the traditional environmental Kuznets curve (EKC) hypothesis, which does not account for trade patterns, CO 2 emissions embodied in trade balances were adopted in several models. To analyze the panel series, this study utilized econometric procedures: panel regression, the panel unit root test, the panel cointegration test, and panel Granger causality. To investigate evidence supporting the pollution haven hypothesis (PHH), this study constructed an equation including CO 2 emissions embodied in net exports as a proportion of consumption. The results from the panel regression model validated the EKC hypothesis, even considering the CO 2 emissions embodied in trade. Results of the panel unit root, panel cointegration, and Granger causality tests showed that CO 2 emissions embodied in trade and economic growth have bi-directional Granger causality. This study provided evidence for the PHH, although some upper countries of net exporters or net importers for CO 2 emissions can be observed. This study highlighted the need to intensify international cooperation to decrease environmental pollutants in both developed and developing countries, and considered the importance of CO 2 emissions embodied in trade by expanding globalization.

Keywords: CO 2 embodied in trade; economic growth; the EKC hypothesis; pollution haven; Granger causality (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:21:p:12114-:d:670818

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