Does the environmental Kuznets curve exist between globalization and energy consumption? Global evidence from the cross‐correlation method

Muhammad Shahbaz, Mantu Mahalik (), Syed Jawad Hussain Shahzad and Shawkat Hammoudeh

International Journal of Finance & Economics, 2019, vol. 24, issue 1, 540-557

Abstract: We explore the nexus between globalization and energy demand for 86 high‐, middle‐, and low‐income countries over the period 1970–2015. We use a simple approach based on the cross‐correlation to understand how globalization and energy consumption are related in terms of time lags and leads. Our findings show that for 64 out of the 86 countries (approximately 74%), there is clear evidence in support of the environmental Kuznets curve (EKC) hypothesis. The globalized environment (e.g., globalization) has been conducive for the majority of the countries in reducing their long‐term energy consumption. From a policy perspective, our findings suggest that the role of “globalization” in the EKC function should not be underestimated by policymakers and governments of these countries while designing a policy framework for the reduction of energy demand in the long run.

Date: 2019
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