The Effects of Local Government Expenditures on Carbon Dioxide Emissions: Evidence from Republic of Korea

Juhyun Oh ()
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Juhyun Oh: College of Business, Gachon University, Seongnam-si 13120, Gyeoggi-do, Republic of Korea

Sustainability, 2023, vol. 15, issue 20, 1-15

Abstract: This study analyzes the direct and indirect effects of local government expenditure for air quality on CO 2 emissions using a two-stage dynamic panel model. The results of the first-stage empirical analysis show that local government expenditure for air quality has a positive effect on per-capita GRDP. In the second-stage empirical analysis, an inverse U-shaped relationship between the per-capita GRDP and CO 2 emissions is observed. The average direct and indirect effects of local government expenditure for air quality on CO 2 emissions indicate that local government expenditure directly reduces CO 2 emissions, while it indirectly increases CO 2 emissions through regional economic growth. However, the direct effect is found to be greater than the indirect effect, and the total effect indicates that local government expenditure for air quality reduces CO 2 emissions. Furthermore, the results demonstrate significant regional disparities in both the direct and indirect effects, emphasizing the pivotal role of tailored air-related expenditure policies in relation to regional economic growth.

Keywords: local government expenditure; CO 2 emissions; gross regional domestic product; dynamic panel model; environmental Kuznets curve (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:20:p:14913-:d:1260657

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