An Empirical Analysis of Trade Market Dynamics on CO2 Emissions: A Study of GCC Economies

Shahida Suleman, Farrukh Nawaz, Mariam Sohail, Umar Kayani, Hassanudin Mohd Thas Thaker and Calvin Cheong Wing Hoh
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Shahida Suleman: Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Malaysia; & Department of Management Sciences, Muhammad Ali Jinnah University, Karachi, Pakistan
Farrukh Nawaz: Faculty of Business Studies, Arab Open University (AOU), Riyadh, Saudi Arabia
Mariam Sohail: ESC Clermont Business School, Clermont Ferrand, 63000, France
Umar Kayani: College of Business, Al Ain University, Abu Dhabi, UAE
Hassanudin Mohd Thas Thaker: Kulliyyah of Economics and Management Sciences, International Islamic University Malaysia, Malaysia
Calvin Cheong Wing Hoh: Department of Economics and Finance, Sunway University Business School, Malaysia

International Journal of Energy Economics and Policy, 2024, vol. 14, issue 6, 114-126

Abstract: This study aims to conduct a comprehensive investigation into the impact of macro trade determinants on carbon dioxide emissions within Gulf Cooperation Council (GCC) economies spanning from 1995 to 2022. Specifically, it explores this influence through the theoretical frameworks of the Pollution Haven Hypothesis (PHH) and the Environmental Kuznets Curve (EKC). Advanced econometric methods, including stepwise regression employing the fully modified least square method and Pool ordinary least square method, are utilized in this research. Granger causality and Johnson cointegration tests are employed to assess both long- and short-term dynamics. The findings reveal that macro trade factors such as total investment, trade reserves, per capita income, and net inflow of foreign direct investment exhibit significant associations with carbon dioxide emissions across both short and long-term timeframes. Particularly noteworthy is the positive and statistically significant impact of per capita income, total investment, foreign direct investment, and gross national savings on CO2 emissions. In contrast, trade reserves demonstrate a significant and negative impact on greenhouse gas emissions.

Keywords: Gulf Cooperation Council; Trade Openness; Drivers; Cointegration; Granger Causality (search for similar items in EconPapers)
JEL-codes: F1 Q5 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2024-06-12

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