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Threshold effects of economic growth on water stress in the Eurozone

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Abstract

This paper empirically examines the environmental Kuznets curve (EKC) hypothesis using a country’s water stress as an indicator of the pressure on renewable water resources. The sample consists of 9 European countries by covering the period 1995–2013. The paper adopts a panel threshold regression model which can predict the threshold level endogenously to analyze whether income per person has an impact on water stress. The empirical findings strongly demonstrate the existence of a threshold beyond which environmental pressures of GDP (real) per capita growth on renewable water resources tend to increase. The growth below the threshold levels has no statistically significant effect on water stress, while the growth rate above the threshold increases stress on water resources. The available empirical findings obtained, albeit limited, tend not to support the EKC hypothesis, which postulates an inverted-U-shaped relationship.

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Notes

  1. The first-generation tests: Levin et al. (2002), Harris and Tzavalis (1999), Breitung (2005), Hadri (2000), Im et al. (2003), Maddala and Wu (1999), Fisher type (Choi (2001)). Second-generation tests: MADF (Taylor and Sarno 1998), SURADF (Breuer et al. 2002), Bai and Ng (2004), CADF (Pesaran 2007), and PANKPSS (Carrion-I Silvestre and Sansó 2006).

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  1. Department of Public Finance, Tekirdağ Namık Kemal University, Tekirdağ, Turkey

    Ömer Esen

  2. Department of Economics, Tekirdağ Namık Kemal University, Tekirdağ, Turkey

    Durmuş Çağrı Yıldırım

  3. Department of Business Administration, Tekirdağ Namık Kemal University, Tekirdağ, Turkey

    Seda Yıldırım

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  1. Ömer Esen
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Esen, Ö., Yıldırım, D.Ç. & Yıldırım, S. Threshold effects of economic growth on water stress in the Eurozone. Environ Sci Pollut Res 27, 31427–31438 (2020). https://doi.org/10.1007/s11356-020-09383-y

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