Endogeneity and nonlinearity in the environmental Kuznets curve: A control function approach

Abstract

This study investigates the existence and shape of an environmental Kuznets curve (EKC) across 16 developed countries and 58 developing countries during the period 1995-2010. The basic model of the EKC is a polynomial equation of real GDP per capita. The EKC model estimated for CO2 emission per capita was extended by using control variables, such as trade, urban population, fossil fuel consumption, and service sector. Based on the nonparametric test of poolability of Baltagi et al. (1996), the relationship was found to have structural stability. A nonparametric pooled regression model was constructed, which allowed functional form flexibility and considered the endogeneity problem often emphasized in the EKC literature. The estimation results show the nonexistence of an EKC for both groups. The study also indicates the existence of nonlinearity and heterogeneity in the relationships between CO2 emission and the control variables across both groups.

Environmental Kuznets Curve Hypothesis in Ethiopia

“…This study performed a causality test using the approach used by Lopez & Weber (2017) and found that GDP causes environmental spending, but not the other way around. The endogeniety test, which is less problematic in a multiple regression of small variables, is performed using the method used by (Akay & Uyar, 2021). Finally, the above equations (equation 7, 8, 9, and 10) are estimated and interpreted after all panel diagnostic issues have been corrected (see appendix).…”

Environmental Kuznets Curve Hypothesis in Ethiopia: Is Environmental Development a Priority Over Economic Development for Ethiopia?

“…This study performed a causality test using the approach submitted by Lopez & Weber (2017) and found that GDP causes environmental spending, but not the other way around. The endogeneity test is performed using the method used by (Akay & Uyar, 2021). The lack of this method was proven prior to analysis of this data set.…”

Genişletilmiş Çevresel Kuznets Eğrisi Modelinde İçsellik Problemi: Panel Kantil Araç Değişken Yaklaşımı

“…Çağlayan Akay ve Kangallı Uyar (2019Uyar ( ), 1995Uyar ( -2010 döneminde İklim Değişikliği Konferansında belirlenen Annex II ve Non-Annex I ülke grupları için nonparametrik bir yöntem olan kontrol fonksiyonu yaklaşımı ile çevresel Kuznets eğrisi hipotezinin geçerliliğini incelenmiştir. Çalışmada kişi başına düşen karbondioksit emisyonu çevresel kirlilik göstergesi olarak kullanılmış ve açıklayıcı değişkenler kişi başına GSYH, fosil yakıt tüketimi, hizmet sektörünün ve ticaret hacminin GSYH içindeki payı ve kentleşme olarak belirlenmiştir.…”