Exploring the impact of entrepreneurial indicators on CO2 emissions within the environmental Kuznets curve framework: a cross-sectional study

Mohsen Khezri, Mohammad Sharif Karimi and Babak Naysary

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Many countries emphasize entrepreneurship promotion as a policy focus. However, empirical research has often neglected the complex environmental consequences associated with such initiatives. In this study, we analyzed data using a panel model from 14 countries, covering the years 2002 to 2018. Our goal was to thoroughly assess the impact of eleven distinct entrepreneurship indicators on CO2 emissions. Our findings indicate that some control variables, like trade liberalization, are fundamental in reducing emissions. This contrasts with traditional views, which typically revolve around a consistent Kuznets curve that depicts the environmental effects of economic growth. Instead, our research uncovers a dynamic pattern transitioning from a concave upward trajectory to an inverted U-shaped curve, primarily due to increased levels of entrepreneurship. Remarkably, various entrepreneurial indicators, such as government support and policies, taxes and bureaucracy, governmental programs, and cultural and social norms, demonstrate direct positive impacts on CO2 emissions. Conversely, other indicators show a mix of positive and negative effects. Furthermore, examining the spill-over effects of entrepreneurship indicators, particularly in their role in energy use intensity and GDP per capita, reveals significant implications for improving energy consumption efficiency. However, it is important to acknowledge that despite the potential for enhanced efficiency, the negative effects resulting from an increased scale of output may not be completely counteracted.

Keywords: CO2 emission; economic development; entrepreneurship; Kuznets curve (search for similar items in EconPapers)
JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-05-30
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Published in Environment, Development and Sustainability, 30, May, 2024. ISSN: 1387-585X

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