The Productive Capacity And Environment: Evidence From OECD Countries

Ihsan Oluc, Mehdi Ben Jebli, Muhlis Can, Ihsan Guzel and Jan Brusselaers

MPRA Paper from University Library of Munich, Germany

Abstract: There are many economic parameters that may affect environmental degradation. At the forefront of these parameters is the productive economic structures of the countries The present paper discusses the dynamic relationship between carbon dioxide (CO2) emissions, economic growth and productive capacity index (PCI) for a panel of 38 OECD countries spanning the period 2000-2018. The empirical study applied PMG-ARDL approach, panel cointegration techniques and Granger causality tests the examine the short and long-run association between the variables. The cross-sectional dependence test of Pesaran (2004) revealed the use of the second generation panel unit root tests (CADF and CIPS). The cointegration relationships between the variables are proved using Westerlund and Pedroni cointegration tests. The estimated coefficients of PMG-ARDL revealed that the environmental Kuznets curve (EKC) hypothesis is established. Besides, the empirical findings obtained from long-run estimation confirm that productive capacity has a significant role on increasing environmental quality.

Keywords: Product Capacity Index; CO2 Emissions; Economic Complexity; Economic Structure; Environment (search for similar items in EconPapers)
JEL-codes: E2 F1 F14 Q5 Q54 Q55 Q57 (search for similar items in EconPapers)
Date: 2022-03-25
New Economics Papers: this item is included in nep-agr, nep-eff, nep-ene, nep-env and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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