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While the notion of Environmental Kuznets Curve (EKC), which relates economic development to pollution, is well established, there is controversy about its shape, incidence and determinants. Moreover, there is an avowed relationship between economic development and international trade. This leads to the conceptualization of the trade-environment tr...
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Context 1
... entire gamut of factors has led to complex relationships between the three dimensions: economic development, trade and environment. Traditionally, the debate on economic development has been centered on the trade and development aspects. After the 1980s, particularly since the era of liberalization and globalization, the debate shifted to free trade, which transcended to reality only with the emergence of WTO. In recent times, however, the realization has dawned upon the world at large that the overarching issue is the environment leading to the emergence of a three-dimensional relationship between trade, environment and economic development. Figure 1 below illustrates the relationship between trade, economic development and the environment envisaged in the form of a global trade-environment ...
Context 2
... recent times, however, the realization has dawned upon the world at large that the overarching issue is the environment leading to the emergence of a three-dimensional relationship between trade, environment and economic development. Figure 1 below illustrates the relationship between trade, economic development and the environment envisaged in the form of a global trade-environment triangle. ...
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Changes in economic development stage and growth type will lead to variations in the CO2 emissions. Traditional empirical analysis of the variations often only considers the impact of influencing factors on CO2 emissions from a single dimension. Under the background of China’s economy transferring from high-speed growth to high-quality development,...
Citations
... Existing studies on carbon emissions and the EKC hypothesis primarily focus on income, international trade, industrialization, foreign direct investment, renewable energy, government expenditure, urbanization, tourism, and environmental regulations Farooq et al., 2022;Djellouli et al., 2022;Grodzicki and Jankiewicz, 2022;Pata et al., 2022;Kaika and Zervas, 2013;Bilgili et al., 2016;Yao et al., 2019). Murthy and Gambhir (2018) argue that EKC studies are incomplete without considering the PHH. This is due to the idea that EKC's connection between economic development and environmental damage remains controversial regarding its form, occurrence, and determinants. ...
... Per capita GDP is closely related to environmental degradation within the EKC hypothesis. However, according to Murthy and Gambhir (2018), besides per capita income, trade and FDI are also linked to environmental changes and degradation. Figure 4 shows a comparison of trade openness and FDI inflows based on the relationship between religion and government in 1990 and 2022. ...
Among the most pressing environmental challenges, climate change is anticipated to pose the highest global threat in the coming decade. This research examines the impact of political economic development on per capita CO2 emissions in 29 countries with state religions, applying the frameworks of Environmental Kuznets Curve (EKC) and Pollution Haven Hypothesis (PHH). Employing the Panel Autoregressive Distributed Lag (PARDL) model, the study analyzes data from 1990 to 2022, incorporating both time series and cross-sectional information. The model’s robustness is verified by replacing CO2 emissions per capita with ecological footprint per person. Results indicate that the EKC hypothesis is not supported in most nations, particularly low-income countries still heavily dependent on fossil fuels. In contrast, the PHH hypothesis is confirmed over the long term, with foreign direct investment (FDI) inflows contributing to increase per capita CO2 emissions, especially in countries with lax environmental regulations. Energy consumption and industrial sector contributions significantly affect emissions, while renewable energy consistently reduces CO2 output. Furthermore, democratic political systems are associated with higher emissions, particularly in rapidly growing economies. The study suggests implementing faith-based and sustainability-oriented approaches, such as a faith-driven economy that incorporates spiritual values into green economic policies. Additionally, faith-based investing is recommended to encourage ethical and environmentally responsible business practices. These strategies aim to help countries with official religions strike a balance between economic growth and environmental conservation in the face of climate change.
... According to the EKC hypothesis, environmental degradation increases in the early stages of economic development and decreases when per capita income is sufficiently high (Churchill et al., 2018;Kuznets, 1955). However, empirical studies on EKC have generated mixed results, with some validating the U-shaped relationship between growth and carbon dioxide (CO 2 ) emissions (Churchill et al., 2020;Grossman and Krueger, 1995;Shahbaz et al., 2017;Fang et al., 2020;Youssef et al., 2016), while others question the inverted U-shaped EKC hypothesis (Kanlı and K€ uç€ ukefe, 2023;Dinga et al., 2022;Murthy and Gambhir, 2018). For instance, Beyene and Kotosz (2020), in a study of East African countries, invalidate the inverted U-shaped EKC in favour of a bell-shaped EKC. ...
... For instance, Beyene and Kotosz (2020), in a study of East African countries, invalidate the inverted U-shaped EKC in favour of a bell-shaped EKC. Similarly, Murthy and Gambhir (2018) reveal an N-shaped EKC for India, while Dinga et al. (2022), in a more inclusive study of 109 countries, show the existence of a dualistic N-shaped EKC from a supply and demand standpoint. A study which focused on OECD countries found mixed support for the EKC hypothesis (Churchill et al., 2018). ...
... Jakada et al. (2023) reported that FDI negatively impacts environmental sustainability in six African countries, and this effect is worsened by ICT penetration, suggesting the need for green technologies. Murthy and Gambhir (2018) argue that excluding FDI from the growth-pollution model is flawed, as FDI inflows are a key growth determinant. Therefore, this paper empirically examines the environmental effects of FDI inflows and economic growth, revisiting the PHH and EKC hypotheses for 46 African countries using a robust quantile regression approach to capture the dataset's heterogeneous structure across different income groups. ...
Purpose
This study examines the environmental effects of foreign direct investment (FDI) inflows and economic growth by revisiting the pollution haven and EKC hypotheses in the context of Africa.
Design/methodology/approach
The underlying relationships are unravelled with the help of quantile regressions for a panel of 46 African countries over the 1996–2022 period.
Findings
The results show that FDI inflows significantly increase CO2 emissions, supporting the pollution haven hypothesis (PHH) in Africa. There is also evidence of the N-shaped EKC hypothesis. When analysing different income groups, PHH and EKC remain consistent, except in low-income countries where only PHH is observed. However, the environmental impact of FDI inflows and economic growth decreases at higher quantiles. These findings suggest that policymakers in Africa should strengthen environmental regulations and adopt common environmental standards that encourage green technologies.
Originality/value
This study fills an empirical research gap by comprehensively examining the relationship between FDI, economic growth, and environmental degradation in African countries. Unlike previous studies focused on the inverted U-shaped EKC, our research reveals the existence of an N-shaped EKC in Africa.
... The EKC may not imply a net reduction in pollution because it says nothing about the system-wide emissions (Gill et al. 2018;Chakravarty 2019;Leal and Marques 2022). Prescribing economic growth as a panacea for environmental ills needs a reconsideration whether it is at the expense of environmental degradation in other places (Murthy and Gambhir 2018). ...
Achieving the national emission reduction targets requires joint efforts of all jurisdictions, whose sustainable development is affected by complex economic and environmental interactions among regions. An interregional environmental assessment (IREA) framework is constructed for China using multiregional input–output techniques to unravel the carbon emission connections behind interregional economic activities. Then, consumption-based emission accounting is applied in sustainability assessment, in comparison with production-based environmental Kuznets curve (EKC) tests to examine the role of regional connections in shaping EKC. Empirical results expose significant asymmetric CO2 transfer among regions in China, where the Central and Western regions have become CO2 haven for the Eastern region. EKC is valid at the national level and manifests marked regional differences between production- and consumption-based curves. The pollution haven effect alters the EKC curve by expediting the emission peak in the developed Eastern region while delaying it in the developing Western region. Thus, revisiting EKCs in the IREA framework reveals that ignoring interregional connections would lead to misleading results. Only when both production- and consumption-based EKCs transcend their turning points can we claim that environmental governance has ushered in a new era of sustainable development.
... The classic theory is still inspiring a lot of empirical research to this day. The results of Murthy and Gambhir [5] confirmed that India presents an N-type EKC, proving that India has indeed become a pollution paradise for developed countries in the process of economic development. But while Awaworyi [6] used Australia as a sample for analysis, the results obtained were consistent with the inverted U-shape of traditional EKC. ...
Open and sustainable development is the theme that underpins a country’s high-quality economic development. This study uses GMM regression, mediation effect test to conduct empirical tests based on the panel data of China’s industrial sectors from 2003 to 2015 to analyze the internal mechanism of the impact of intermediate product imports on China’s industrial pollution emissions. The results show that (1) Intermediate product imports can significantly promote the emission reduction of industrial wastes, including wastewater, waste gas and solid waste. (2) Considering the differences in the level of pollution intensity, this paper classified the sample and found the impact is heterogeneous that for the heavily, moderately, lightly polluted industries, intermediate product imports have different negative impacts on their pollution emissions. (3) Intermediate products imports reduce industrial pollution emissions through import competition effect, variety effect and technology spillover effect, and all of them play a partial mediating role.
... In recent years, despite the multiplicity of studies devoted to the investigation of the underlying determinants of environmental degradation, very little has been done with respect to the labour force-environmental quality nexus. For instance, while several studies have found economic growth as a principal source of environmental pollution [11][12][13], others reveal that urbanisation, energy consumption, population dynamics, information and communication technologies [2,[14][15][16][17][18], institutional quality, industrialisation, globalisation, and foreign direct investments [19][20][21] equally contribute to the deterioration of environmental quality. Studies focusing on the growth-pollution nexus often make reference to the inverted U-shaped environmental Kuznets curve hypothesis, according to which environmental degradation initially worsens at the early stages of economic development and then improves beyond a certain development threshold [22]. ...
The pursuit of environmental sustainability and decent employment are among the fundamental macroeconomic priorities of the 21st century. Extant studies reveal that labour market dynamics have a bearing on global greenhouse gas (GHG) emissions. Thus, this study empirically examines the effect of labour force participation on environmental sustainability from a global perspective. Employing the Driscoll-Kraay fixed effects (DKFE) and system Generalised Method of Moments (GMM) estimators for a panel of 173 countries from 1996 to 2020, we find that labour force participation (LFP) enhances environmental quality. When controlled for income differences, the study reveals that while LFP significantly reduces environmental pollution in Low-income and High-income countries, it is environment-degrading in Upper-middle-income countries. Furthermore, with regard to level of development and geographical region, rising LFP significantly reduces GHG emissions in developing countries, whereas the effect is insignificant in developed economies. Likewise, the effect of LFP is divergent across geographical regions. However, when LFP is disaggregated into the male and female components, the results show that male-LFP is environment degrading while female-LFP is environmental augmenting. Contingent on these findings, practical policy implications are discussed.
... Especially countries that industrialized at an early stage endure pollution until per capita income reaches a particular milestone and then need a clean environment once the nation becomes wealthy. In the literature, this situation is explained by the environmental Kuznet curve theory (Murthy and Gambhir 2018;Cansino et al. 2019;Rana and Sharma 2020;Polloni-Silva et al. 2021). Therefore, governments strengthen environmental regulations, and companies use clean technologies in the production process to avoid high environmental taxes. ...
... Since carbon dioxide emissions contribute the most to environmental degradation among greenhouse gas emissions (EuroStat 2023), studies generally use CO 2 (Huynh and Hoang 2019; Rahman and Ahmad 2019; Rana and Sharma 2020;Bulut et al. 2021;Gong et al. 2023;Firoj et al. 2023) as the environmental degradation variable. Furthermore, the majority of the studies examining the link between FDI and CO 2 have analyzed developing country groups with panel data methods (MENA, BRICS, MINT, PIIGS) (Shao et al. 2019;Salehnia et al. 2020;Balsalobre-Lorente et al. 2022;Tasdemir and Ozcelik 2023), in some studies, developing and underdeveloped countries are discussed with time series analysis (China, Italy, Pakistan, India, Turkey, Korea) (Murthy and Gambhir 2018;Liu et al. 2019;Nadeem et al. 2020;Bulus and Koc 2021;Cil 2023;Javed et al. 2023). It has been determined that 1 9 9 0 1 9 9 2 1 9 9 4 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 2 0 0 6 2 0 0 8 2 0 1 0 2 0 1 2 2 0 1 4 2 0 1 6 2 0 1 8 ...
... In this case, it can be argued that FDIN changes from source countries to these countries similarly affect CO 2 , supporting the pollution haven hypothesis (PHH). This result supports the findings, especially for developing countries (Murthy and Gambhir 2018;Huynh and Hoang 2019;Benzerrouk et al. 2021;Bulus and Koc 2021;Bulut et al. 2021;Danish and Ahmad 2021;Cil 2023;Dutta and Hazarika 2023;Tasdemir and Ozcelik 2023;Wencong et al. 2023 When the effect of foreign investment inflows on CO 2 is analyzed with cross-shocks, it is determined that there is a statistically significant causality for Belgium, Denmark, Finland, Romania, and Sweden in this case, similar to the pollution halo hypothesis, it can be stated that the relationship has a negative direction in these countries, as in Kim and Adilov (2012), Omri et al. (2014), Shahbaz et al. (2015), Benzerrouk et al. (2021), Li et al. (2022), Chien et al. (2023), which address the developed country/country group in the literature. ...
Uncertainty remains regarding the impact of foreign direct investments on countries' environmental policies and pollution levels. Therefore, this study examines the relationship between foreign direct investment inflows, outflows, and carbon dioxide emissions for EU (European Union) member states. Accordingly, the data for the period 1993–2019 were subjected to the Panel Fourier symmetric and asymmetric causality tests for 21 EU countries. According to the Panel Fourier symmetric causality test results, the effect of foreign investment outflows on carbon dioxide emissions is more dominant in general. While there is a bidirectional relationship between these variables in the Austrian and Slovak Republics, there is a unidirectional relationship between foreign investment outflows to carbon dioxide emissions in Belgium, Bulgaria, Cyprus, Ireland, and Portugal. On the other hand, one-way causality was found from foreign investment inflows to carbon dioxide emissions in Belgium, Cyprus, France, Ireland, and Romania and from carbon dioxide emissions to foreign investment inflows in Finland, Greece, and Sweden. According to the Panel Fourier asymmetric causality test results, causality between variables is statistically significant in many countries. This shows that the asymmetric relationship is essential for the variables.
... Similarly, the nexus between ICT and emissions has been widely tested, yielding mixed evidence in both developing and developed countries [10,12] and developed countries. An overwhelming number of studies have validated the EKC hypothesis in Asia and other developing regions, confirming that the impact of growth on economic degradation diminishes with higher levels of development and income [51,52]. Similarly, evidence of good political, economic, and governance institutions enhancing environmental quality (reducing CO 2 emissions) supports the positive role that institutional quality can play in the environment when countries experience rapid economic growth [7,36,44,[53][54][55]. ...
This study examines the role of corruption, green energy, trade, innovation, natural resources, and information and communication technology (ICT) in carbon dioxide (CO2) emissions in developing economies from 2000 to 2018. We use Driscoll-Kraay panel-corrected estimators to identify the direct and indirect environmental impacts of corruption through interaction effects. We find that controlling corruption in developing countries has a negative impact on the environment or increases CO2 emissions. Similarly, the interaction effect between corruption control and natural resources increases CO2 emissions. Conversely, corruption control and green energy indirectly reduce environmental quality. We found evidence that green energy and innovation can help reduce carbon emissions. Furthermore, the interaction between corruption control, innovation, and ICT increases environmental quality in the long run. These results also support the Environmental Kuznets Curve hypothesis for the sample period. Bootstrap quantile regression was used as a robustness check. The results also show that the control of corruption, the depletion of natural resources and the use of non-renewable energy all contributed to the increase in CO2 emissions. Green energy, innovation, and ICT are the drivers of environmental sustainability growth in developing countries. The findings suggest that developing countries should increase their investment in green energy generation, and promote green innovation in high energy-intensive sectors, in order to achieve the Sustainable Development Goals (SDGs).
... Georg & Justesen (2017) dan Murthy & Gambhir (2018) menjelaskan bahwa perusa haan dapat menerapkan sistem akuntansi lingkungan dengan baik untuk membantu pihak manajemen dalam pengambilan kepu tusan terkait penanganan masalah lingkung an perusahaan. Dengan adanya sistem ini dapat memberikan sebuah informasi yang dapat membantu perusahaan dalam pe ningkatan pendapatan dengan melakukan programprogram penyelamatan lingkungan seperti menciptakan produk daur ulang dari limbah tersebut yang dapat mempunyai nilai ekonomis yang tinggi. ...
Abstrak: Aktualisasi Ajaran Islam dalam Praktik Akuntansi Lingkung an. Penelitian ini bertujuan untuk menjelaskan praktik akun tansi lingkungan berdasarkan perspektif Islam. Metode yang digunakan adalah configurative-ideographic studys pada perusahaan pabrik gula di Bone. Hasil penelitian menjelaskan bahwa perhatian lingkungan meli puti efisiensi energi dan daur ulbang limbah. Selain itu, pengelola juga memiliki tanggung jawab lingkungan berupa penggunaan energi ramah lingkungan dan kebiasaan daur ulang. Pada aspek pelaporan pengelola memiliki komponen biaya lingkungan yang mencakup aspek manusia dan alam. Dengan menyertakan nilai tauhid, ajaran Islam menuntut ma nusia melestarikan lingkungan sebagai salah satu tugas khalifah. Abstract: Actualization of Islamic Teachings in Environmental Accounting Practices. This study aims to explain environmental accounting practices based on an Islamic perspective. The method used is configura-tive-ideographic studys on sugar factory companies in Bone. The results shows that environmental concerns include energy efficiency and recycling of waste. In addition, managers also have environmental responsibilities in the form of environmentally friendly energy use and recycling habits. In the reporting aspect, the managers have an environmental cost component that includes both human and natural aspects. By including the value of tawhid, Islamic teachings require humans to preserve the environment, as one of the tasks of the caliph.
... Zheng and Shi (2017), in the study on China for the period 2004-2013, showed that the validity of the pollution haven hypothesis is related to the type of environmental policy carried out as well as industrial characteristics. Murthy and Gambhir (2018) confirmed the validity of EKC and PHH in India for the period 1994-2014. In their study, Sarkodie and Strezov (2019) concluded that the pollution haven hypothesis is valid, finding that there is a positive relationship between the CO2 emissions and energy use in emerging economies such as China, India, Indonesia, Iran, and South Africa. ...
Venezuela is among the several countries of the world endowed with natural resources such as oil rent and others. The influence of these resources, which can be felt in both economic and environmental development, is capable of impacting sustainable development goals of any country rich in them. Considering the global climate goals, it is essential to investigate the impact of natural resource rent on its sustainable development goals. We applied Venezuelan country‐specific data of 1972–2014 for an insightful study of the country's sustainable development amidst high resource rent with regard to both economic and environmental performance. The principles of the environmental Kuznets curve (EKC) and pollution haven and halo hypothesis (PHH) were considered to ascertain the pattern and effect of the economic growth and foreign direct investment (FDI) on Venezuelan environmental performance. Different methods such as the autoregressive distributed lag (ARDL) dynamics and bounds, structural break, and Granger causality test were applied for an accurate estimation and insightful analysis. From the ARDL estimations, we found an N‐shaped Kuznets curve, which counters the U‐shaped Kuznets, for the case of Venezuela. Both natural resources and FDI are found to impact positively on the environment, and this confirmed the pollution halo hypothesis for Venezuela. Fossil fuel energy source is found to impact negatively Venezuela's environment with positive relationship between energy use and CO2. From the Granger causality finding, a unidirectional Granger causality is found to transmit from FDI to environment, while bidirectional Granger causality is found to transmit between economic growth and environment. With the findings from both analyses, especially from the vector error correction model (VECM) Granger causality, a nexus is established among economic growth, environment, and FDI, which confirmed the pollution halo hypothesis.
... While several studies support the inverted U-shaped link between environmental quality and economic development (such as Iwata et al. 2010;Mert et al. 2019;Liu et al. 2019;Sarkodie and Ozturk, 2020;Polloni-Silva et al. 2021;Bulut 2021;Akram et al. 2022), some of them found mixed outcomes (such as Wang et al. 2017;Murthy and Gambhir 2018). However, many studies could not confirm the EKC hypothesis for their sample (Bakirtas and Cetin 2017;Nawaz et al. 2021). ...
This study investigated pollution haven hypothesis (PHH) validation and existence of the environmental Kuznets curve (EKC) hypothesis in Bangladesh. The study used CO2 emissions as the key indicator of environmental pollution. Moreover, we considered relevant explanatory variables such as foreign direct investments, trade openness, financial development, gross fixed capital formation, energy consumption and urbanization to achieve our goals. Covering the time series data from 1986 to 2018, the autoregressive distributed lag (ARDL) approach was applied. The findings revealed a long-run cointegration between the considered variables, and the ARDL results cannot validate the PHH in Bangladesh. These results contribute to the existing literature by concentrating on the EKC hypothesis for financial development purposes. Furthermore, we found that urbanization, gross fixed capital formation and trade openness positively influence CO2 emissions, while energy use reduces CO2 emissions. These findings suggest that Bangladesh should take advantage of the invalidity of the PHH and introduce eco-friendly urbanization planning to mitigate detrimental effects of environmental pollution.
