Foreign trade, financial development, agriculture, energy consumption and CO2 emission: testing EKC among emerging economies
Indian Growth and Development Review
ISSN: 1753-8254
Article publication date: 26 August 2020
Issue publication date: 12 March 2021
Abstract
Purpose
The main purpose of this study is to explore the presence of the EKC hypothesis in emerging economies. Additionally, the present study also explores the existence of the “resource curse hypothesis” (RCH), and the causal relationship among the variables that are considered for testing the presence of EKC and RCH hypothesis for a panel of selected emerging economies for the time period between 1990 and 2014.
Design/methodology/approach
The authors performed unit root test followed by cointegration test to test the existence of cointegrating relationship among the variables. Dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) methods are used to obtain long-run estimates of considered variables, and the Granger causality test is performed to test the directional causality.
Findings
The long-run estimates obtained from DOLS and FMOLS techniques support the presence of the EKC (inverted U-shape) and the RCH.
Originality/value
To the best of the authors’ knowledge, the present work is the pioneer study for EKC and RCH investigation in the context of emerging economies. The policy implication is that these economies should look forward to drafting new policies to reduce environmental degradation and promote sustainable development.
Keywords
Citation
Koshta, N., Bashir, H.A. and Samad, T.A. (2021), "Foreign trade, financial development, agriculture, energy consumption and CO2 emission: testing EKC among emerging economies", Indian Growth and Development Review, Vol. 14 No. 1, pp. 50-80. https://doi.org/10.1108/IGDR-10-2019-0117
Publisher
:Emerald Publishing Limited
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