The relationships between corruption and pollution on corruption regimes

Shu-Chen Chang () and Teng-yu Chang ()
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Shu-Chen Chang: Department of Business Administration, National Formosa University
Teng-yu Chang: Graduate Institute of Business and Management, National Formosa University

Economics Bulletin, 2010, vol. 30, issue 3, 1942-1949

Abstract: Previous studies have focused mainly on the effect of corruption on pollution. The results of these studies show an inverted U-shaped relationship between economic growth and pollution. In addition, some researchers have suggested that corruption plays an important role in determining pollution. This study proposes the hypothesis of a nonlinear long-run relationship between pollution and corruption. The goal of the study is to investigate the threshold cointegration effect of pollution on corruption using panel data for 62 countries over the period from 1997 to 2004. The results show that the effect of the Corruption Perceptions Index (CPI) on pollution is insignificant in low-corruption regimes. This implies that corruption does not slow down environmental pollution in countries with low corruption. The impact of the CPI on environmental pollution is also insignificant in high-corruption regimes. This result implies that corruption has no adverse impact on environmental pollution in countries with high corruption.

Keywords: Corruption; Pollution; Threshold; Error-Correction Model (search for similar items in EconPapers)
JEL-codes: O1 Q5 (search for similar items in EconPapers)
Date: 2010-07-27
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