Bounds testing approach to analysis of the environment Kuznets curve hypothesis

Olugbenga Onafowora () and Oluwole Owoye

Energy Economics, 2014, vol. 44, issue C, 47-62

Abstract: This paper examines the long-run and the dynamic temporal relationships between economic growth, energy consumption, population density, trade openness, and carbon dioxide (CO2) emissions in Brazil, China, Egypt, Japan, Mexico, Nigeria, South Korea, and South Africa based on the environment Kuznets curve (EKC) hypothesis. We employ the ARDL Bounds test to cointegration and CUSUM and CUSUMSQ tests to ensure cointegration and parameter stability. The estimated results show that the inverted U-shaped EKC hypothesis holds in Japan and South Korea. In the other six countries, the long-run relationship between economic growth and CO2 emissions follows an N-shaped trajectory and the estimated turning points are much higher than the sample mean. In addition, the results indicate that energy consumption Granger-causes both CO2 emissions and economic growth in all the countries. Our results are consistent with previous studies that show that there is no unique relationship between energy consumption, population density, economic growth, trade openness, and the environment across countries.

Keywords: Environmental Kuznets curve (EKC); ARDL bounds test; CO2 emissions; Economic growth; Energy consumption (search for similar items in EconPapers)
JEL-codes: C23 C32 F18 O13 Q53 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (149)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:44:y:2014:i:c:p:47-62

DOI: 10.1016/j.eneco.2014.03.025

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