THE ENVIRONMENTAL KUZNETS CURVE FOR CARBON DIOXIDE EMISSIONS AND TRADE ON BELT AND ROAD INITIATIVE COUNTRIES: A SPATIAL PANEL DATA APPROACH

Yasir Khan and Qiu Bin ()
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Yasir Khan: School of Economics & Management, Southeast University, 211198 Nanjing, P. R. China
Qiu Bin: School of Economics & Management, Southeast University, 211198 Nanjing, P. R. China

The Singapore Economic Review (SER), 2020, vol. 65, issue 04, 1099-1126

Abstract: This paper empirically examines the nexus between CO2 emissions and international trade for the 65 Belt and Road Initiative (BRI) economies over the period of 1985–2017. We first consider the cross-sectional dependence and slope homogeneity test in the panel, and we observed from the results that there is substantial heterogeneity and cross-sectional dependence. We employed the results of the common correlated effects mean group (CCEMG) estimator and determined that for all 65 BRI economies, foreign direct investment inflow, gross domestic product (GDP) squared and urbanization had a positive and significant impact on carbon emissions (CO2). Moreover, this study found that foreign direct investment inflow led to an increase in carbon emissions in BRI countries across South Asia, Southeast Asia, East Asia and Europe. Finally, on the basis of the panel causality test, we found evidence of various causality associations among the selected variables across the regions. These findings are significant for the related policymakers in BRI countries, as they can assist in developing appropriate carbon emission, trade and energy policies with the goal of reducing carbon emissions.

Keywords: CO2 emissions and international trade; FDI; EKC; environmental impact; Belt and Road Initiative (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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DOI: 10.1142/S0217590819500255

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