Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/319555 
Erscheinungsjahr: 
2020
Quellenangabe: 
[Journal:] International Trade, Politics and Development (ITPD) [ISSN:] 2632-122X [Volume:] 4 [Issue:] 2 [Year:] 2020 [Pages:] 141-160
Verlag: 
Emerald, Leeds
Zusammenfassung: 
Purpose Based on the hypothesis of the environmental Kuznets curve (EKC), the purpose of this study is to investigate the relationship between environmental pollutants (as measured by CO2 emissions) and GDP for India, over the period 1980-2012. The presence of an inverted "U" shape relationship is examined while controlling for factors such as the degree of trade openness, foreign direct investment, oil prices, the legal system and industrialization. Design/methodology/approach To verify whether the EKC follows a linear, quadratic or polynomial form, autoregressive distributed lag (ARDL) bounds testing approach for cointegration with structural breaks is adopted. The annual time series data for carbon emissions (CO2), economic growth (GDP), industrial development (industrialization), foreign direct investment and trade openness have been obtained from World Development Indicators online database. Crude oil price (international price index) for the period is collected from the International Monetary Fund. Data for total petroleum consumption are collected from the US Energy Information Agency. Data for economic freedom variables are from the Fraser Institute's Economic Freedom Index's online database. Findings The findings support the existence of inverted U-shaped EKC in the short-run, but not in the long-run. A linear monotonic relationship has also been estimated in select model specifications. Additionally, trade openness has been estimated to reduce emissions in models, which incorporate FDI. Else, where significant, its impact on carbon emissions is adverse. A rise in fuel price leads to reduction in carbon emissions across model specifications. Further, the lower size of government degrades the environment both in the long-run and short-run. Practical implications Given the existence of the pollution haven hypothesis, wherein more trade and foreign direct investments cause environmental degradation, the paper proposes formulation of appropriate regulatory mechanisms that are environmentally friendly. Additionally, India's new economic policies, favoring liberalization, privatization and globalization, reinforces the need to strengthen environmental regulations. Originality/value Incorporation of economic freedom as measured by the "Size of Government" in the EKC model is unique. "Size of Government" deserves a special mention. The rationale for including this explanatory variable is to understand whether countries with lower government size are more polluting. After all, theory does suggest that goods and services, which have higher social cost vis-à-vis private cost, shall be overproduced in economies that adopt more market-friendly policies, necessitating government intervention. In the study, size of government is measured as per the definition and methodology adopted by Fraser Institute's Economic Freedom of the World Index.
Schlagwörter: 
Autoregressive distributed lag (ARDL)
Economic freedom
Environmental Kuznets curve (EKC)
Foreign direct investment
India
Oil prices
Size of government
Trade openness
Persistent Identifier der Erstveröffentlichung: 
Creative-Commons-Lizenz: 
cc-by Logo
Dokumentart: 
Article

Datei(en):
Datei
Größe
411.62 kB





Publikationen in EconStor sind urheberrechtlich geschützt.