Abstract
In the context of globalisation, is a country’s level of development an obstacle to its environmental performance? The main objective of this research is to identify the role played in the environmental performance of countries with different levels of development, globalisation, and environmental regulation, by the three dimensions and two new measures of globalisation, de jure and de facto. This analysis was accomplished by assessing the environmental curve which relates economic growth to environmental degradation, known as the environmental Kuznets curve, for a sample of 32 developed and 26 developing economies from 1995 to 2017. It was found that developed countries produced an inverted U-shaped curve and that globalisation had a mostly beneficial effect on the environment. In contrast, developing economies produced a U-shaped curve and globalisation was generally harmful. Globalisation caused reductions of 0.88% and 0.85% in the environmental degradation of developed countries, and increases of 0.20% and 0.52% in developing ones. Political globalisation produced different effects for each measure in developed countries and had no effect in developing countries. Economic globalisation suggests the relocation of polluting industries from developed to developing countries. As there is currently very little literature on the new measures of globalisation, this study provides fresh insights for policymakers devising appropriate measures to achieve sustainability in both developed and developing countries.
This is a preview of subscription content, log in via an institution to check access.
Source: Own elaboration
Similar content being viewed by others
Abbreviations
- ARDL:
-
Autoregressive distributed lag
- CD:
-
Cross section dependence
- CIPS:
-
Second-generation unit root test
- CO2 :
-
Carbon dioxide
- ECM:
-
Error correction model
- EKC:
-
Environmental Kuznets curve
- FDI:
-
Foreign direct investment
- GDP:
-
Gross domestic product
References
Ahmad, N., & Du, L. (2017). Effects of energy production and CO2 emissions on economic growth in Iran: ARDL approach. Energy, 123, 521–537. https://doi.org/10.1016/j.energy.2017.01.144.
Apergis, N., & Payne, J. E. (2009). CO2 emissions, energy usage, and output in Central America. Energy Policy, 37, 3282–3286. https://doi.org/10.1016/j.enpol.2009.03.048.
Bilgili, F., Ulucak, R., Koçak, E., & İlkay, S. Ç. (2020). Does globalization matter for environmental sustainability? Empirical investigation for Turkey by Markov regime switching models. Environmental Science and Pollution Research, 27, 1087–1100. https://doi.org/10.1007/s11356-019-06996-w.
Choi, I. (2001). Unit root tests for panel data. Journal of International Money and Finance, 20, 249–272.
Chung, S. (2014). Environmental regulation and foreign direct investment: Evidence from South Korea. Journal of Development Economics, 108, 222–236. https://doi.org/10.1016/j.jdeveco.2014.01.003.
Clemente, J., Montañés, A., & Reyes, M. (1998). Testing for a unit root in variables with a double change in the mean. Economic Letters, 59, 175–182. https://doi.org/10.1016/s0165-1765(98)00052-4.
Copeland, B. R., & Taylor, M. S. (2004). Trade, growth, and the environment. Journal of Economic Literature, 42, 7–71. https://doi.org/10.1257/002205104773558047.
Dean, J. M., Lovely, M. E., & Wang, H. (2009). Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China. Journal of Development Economics, 90, 1–13. https://doi.org/10.1016/j.jdeveco.2008.11.007.
Dhrifi, A., Jaziri, R., & Alnahdi, S. (2020). Does foreign direct investment and environmental degradation matter for poverty? Evidence from developing countries. Structural Change and Economic Dynamics, 52, 13–21. https://doi.org/10.1016/j.strueco.2019.09.008.
Dinda, S. (2004). Environmental Kuznets Curve hypothesis: A survey. Ecological Economics, 49, 431–455. https://doi.org/10.1016/j.ecolecon.2004.02.011.
Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38, 1091–1110. https://doi.org/10.1080/00036840500392078.
Dreher, A., Gaston, N., & Martens, P. (2008). Measuring globalisation. Gauging its consequences. New York: Springer.
Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80, 549–560. https://doi.org/10.1162/003465398557825.
Frees, E. W. (1995). Assessing cross-sectional correlation in panel data. Journal of Economics, 69, 393–414.
Friedman, M. (1937). The use of ranks to avoid the assumption of normality implicit in the analysis of variance. Journal of American Statistical Association, 32, 675–701.
Gozgor, G., Mahalik, M. K., Demir, E., & Padhan, H. (2020). The impact of economic globalization on renewable energy in the OECD countries. Energy Policy, 139, 111365. https://doi.org/10.1016/j.enpol.2020.111365.
Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American Free Trade Agreement. National Bureau of Economic Research working paper ser no. 3914:1–57. doi:10.3386/w3914.
Guan, J., Kirikkaleli, D., Bibi, A., & Zhang, W. (2020). Natural resources rents nexus with financial development in the presence of globalization: Is the “resource curse” exist or myth? Resources Policy, 66, 101641. https://doi.org/10.1016/j.resourpol.2020.101641.
Gygli, S., Haelg, F., Potrafke, N., & Sturm, J. E. (2019). The KOF Globalisation Index—Revisited. The Review of International Organizations, 14, 543–574. https://doi.org/10.1007/s11558-019-09344-2.
Hasková, S. (2017). Holistic assessment and ethical disputation on a new trend in solid biofuels. Science and Engineering Ethics. https://doi.org/10.1007/s11948-016-9790-1.
Hoechele, D. (2010). Robust standard errors for panel regressions with cross-sectional dependence. The Stata Journal, 10, 288–308.
Hoechle, D. (2007). Robust standard errors for panel regressions with cross-sectional dependence. The Stata Journal, 7, 281–312.
Intriligator, M. D. (2004). Globalization of the world economy: Potential benefits and costs and a net assessment. J Policy Model, 26, 485–498. https://doi.org/10.1016/j.jpolmod.2004.04.004.
Kaika, D., & Zervas, E. (2013). The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case. Energy Policy, 62, 1392–1402. https://doi.org/10.1016/j.enpol.2013.07.131.
Khan, M. K., Teng, J. Z., Khan, M. I., & Khan, M. O. (2019). Impact of globalization, economic factors and energy consumption on CO2 emissions in Pakistan. Science of the Total Environment, 688, 424–436. https://doi.org/10.1016/j.scitotenv.2019.06.065.
Kovacova, M., Kliestik, T., Pera, A., et al. (2019). Big data governance of automated algorithmic decision-making processes. Review of Contemporary Philosophy, 18, 126–132. https://doi.org/10.22381/RCP1820196.
Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45, 1–28. https://doi.org/10.1596/978-0-8213-7318-7.
Lantz, V., & Feng, Q. (2006). Assessing income, population, and technology impacts on CO2 emissions in Canada: Where’s the EKC? Ecological Economics, 57, 229–238. https://doi.org/10.1016/j.ecolecon.2005.04.006.
Leal, P. H., & Marques, A. C. (2019a). Rediscovering the EKC hypothesis on the high and low globalized OECD countries. In M. Shahbaz & D. Balsalobre (Eds.), Green energy and technology (pp. 85–114). Berlin: Springer.
Leal, P. H., & Marques, A. C. (2019b). Are de jure and de facto globalization undermining the environment? Evidence from high and low globalized EU countries. Journal of Environmental Management, 250, 109460. https://doi.org/10.1016/j.jenvman.2019.109460.
Leal, P. H., & Marques, A. C. (2020). Rediscovering the EKC hypothesis for the 20 highest CO2 emitters among OECD countries by level of globalization. International Economics. https://doi.org/10.1016/j.inteco.2020.07.001.
Lemos, M. C., & Agrawal, A. (2006). Environmental governance. Annual Review of Environment and Resources, 31, 297–325. https://doi.org/10.1146/annurev.energy.31.042605.135621.
Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Economics, 108, 1–24. https://doi.org/10.1016/S0304-4076(01)00098-7.
Liu, M., Ren, X., Cheng, C., & Wang, Z. (2020). The role of globalization in CO2 emissions: A semi-parametric panel data analysis for G7. Science of the Total Environment, 718, 137379. https://doi.org/10.1016/j.scitotenv.2020.137379.
Machová, V., & Vochozka, M. (2019). Analysis of business companies based on artificial neural networks. SHS Web of Conferences, 61, 1013. https://doi.org/10.1051/shsconf/20196101013.
Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61, 631–652. https://doi.org/10.1111/1468-0084.0610s1631.
Mardoyan, A., & Braun, P. (2015). Analysis of Czech subsidies for solid biofuels. International Journal of Green Energy, 12, 405–408. https://doi.org/10.1080/15435075.2013.841163.
Maroušek, J., Bartoš, P., Filip, M., et al. (2020a). Advances in the agrochemical utilization of fermentation residues reduce the cost of purpose-grown phytomass for biogas production. Energy Sources Part A Recovery Utilization and Environmental Effects. https://doi.org/10.1080/15567036.2020.1738597.
Maroušek, J., Rowland, Z., Valášková, K., & Král, P. (2020b). Techno-economic assessment of potato waste management in developing economies. Clean Technologies and Environmental Policy, 22, 937–944. https://doi.org/10.1007/s10098-020-01835-w.
Maroušek, J., Strunecký, O., & Stehel, V. (2019). Biochar farming: Defining economically perspective applications. Clean Technologies and Environmental Policy, 21, 1389–1395. https://doi.org/10.1007/s10098-019-01728-7.
Marques, A. C., Fuinhas, J. A., & Leal, P. A. (2018). The impact of economic growth on CO2 emissions in Australia: The Environmental Kuznets Curve and the decoupling index. Environmental Science and Pollution Research, 25, 27283–27296. https://doi.org/10.1007/s11356-018-2768-6.
Martens, P., Caselli, M., De Lombaerde, P., et al. (2015). New directions in globalization indices. Globalizations, 12, 217–228. https://doi.org/10.1080/14747731.2014.944336.
Moutinho, V., Varum, C., & Madaleno, M. (2017). How economic growth affects emissions? An investigation of the Environmental Kuznets Curve in Portuguese and Spanish economic activity sectors. Energy Policy, 106, 326–344. https://doi.org/10.1016/j.enpol.2017.03.069.
Panayotou, T. (1993). Empirical tests and policy analysis of environmental degradation at different stages of economic development. Technol. Environ. Employ. Geneva Int. Labour Off. World Empl (pp. 13–36).
Papageorgiou, T., Michaelides, P. G., & Tsionas, E. G. (2016). Business cycle determinants and fiscal policy: A panel ARDL approach for EMU. Journal of Economic Asymmetries, 13, 57–68. https://doi.org/10.1016/j.jeca.2015.12.001.
Pesaran, M. H. (2004). General diagnostic tests for cross section dependence in panels general diagnostic tests for cross section dependence in panels.
Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Economics, 22, 265–312. https://doi.org/10.1002/jae.951.
Pesaran, M. H., Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of American Statistical Association, 94, 621–634. https://doi.org/10.1080/01621459.1999.10474156.
Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels.
Qiao, H., Zheng, F., Jiang, H., & Dong, K. (2019). The greenhouse effect of the agriculture-economic growth-renewable energy nexus: Evidence from G20 countries. Science of the Total Environment, 671, 722–731. https://doi.org/10.1016/j.scitotenv.2019.03.336.
Rafindadi, A. A., & Usman, O. (2019). Globalization, energy use, and environmental degradation in South Africa: Startling empirical evidence from the Maki-cointegration test. Journal of Environmental Management, 244, 265–275. https://doi.org/10.1016/j.jenvman.2019.05.048.
Rahman, M. M. (2020). Environmental degradation: The role of electricity consumption, economic growth and globalisation. Journal of Environmental Management, 253, 109742. https://doi.org/10.1016/j.jenvman.2019.109742.
Rennen, W., & Martens, P. (2003). The globalisation timeline. Integrated Assessment, 4, 137–144. https://doi.org/10.1076/iaij.4.3.137.23768.
Rudolph, A., & Figge, L. (2017). Determinants of ecological footprints: What is the role of globalization? Ecological Indicators, 81, 348–361. https://doi.org/10.1016/j.ecolind.2017.04.060.
Sari, R., & Soytas, U. (2009). Are global warming and economic growth compatible? Evidence from five OPEC countries? Applied Energy, 86, 1887–1893. https://doi.org/10.1016/j.apenergy.2008.12.007.
Sarkodie, S. A., & Ozturk, I. (2020). Investigating the Environmental Kuznets Curve hypothesis in Kenya: A multivariate analysis. Renewable and Sustainable Energy Reviews, 117, 109481. https://doi.org/10.1016/j.rser.2019.109481.
Sarkodie, S. A., & Strezov, V. (2018). Empirical study of the Environmental Kuznets Curve and environmental sustainability curve hypothesis for Australia, China, Ghana and USA. Journal of Cleaner Production, 201, 98–110. https://doi.org/10.1016/j.jclepro.2018.08.039.
Sarkodie, S. A., & Strezov, V. (2019). A review on Environmental Kuznets Curve hypothesis using bibliometric and meta-analysis. Science of the Total Environment, 649, 128–145. https://doi.org/10.1016/j.scitotenv.2018.08.276.
Sethi, P., Chakrabarti, D., & Bhattacharjee, S. (2020). Globalization, financial development and economic growth: Perils on the environmental sustainability of an emerging economy. Journal of Policy Modeling. https://doi.org/10.1016/j.jpolmod.2020.01.007.
Shafik, N., & Bandyopadhyay, S. (1992). Economic growth and environmental quality: Time series and cross-country evidence. Policy Res Work Pap Ser 18:55. doi: 10.1108/14777830710778328.
Shahbaz, M., Kumar, M., Jawad, S., & Shahzad, H. (2019). Testing the globalization-driven carbon emissions hypothesis: International evidence. International Economics. https://doi.org/10.1016/j.inteco.2019.02.002.
Shahbaz, M., Shahzad, S. J. H., & Mahalik, M. K. (2018). Is globalization detrimental to CO2 emissions in Japan? New threshold analysis. Environmental Modeling and Assessment, 23, 557–568. https://doi.org/10.1007/s10666-017-9584-0.
Soytas, U., Sari, R., & Ewing, B. T. (2007). Energy consumption, income, and carbon emissions in the United States. Ecological Economics, 62, 482–489. https://doi.org/10.1016/j.ecolecon.2006.07.009.
Stehel, V., Rowland, Z., & Mareček, J. (2019). Valuation of intangible assets deposit into capital company in case of specific transaction. AD ALTA-Journal of Interdisciplinary Research, 9, 287–291.
Stern, D. I. (2004). The rise and fall of the Environmental Kuznets Curve. World Development, 32, 1419–1439. https://doi.org/10.1016/j.worlddev.2004.03.004.
Suki, N. M., Sharif, A., Afshan, S., & Suki, N. M. (2020). Revisiting the Environmental Kuznets Curve in Malaysia: The role of globalization in sustainable environment. Journal of Cleaner Production, 264, 121669. https://doi.org/10.1016/j.jclepro.2020.121669.
Udell, M., Stehel, V., Kliestik, T., et al. (2019). Towards a smart automated society: Cognitive technologies, knowledge production, and economic growth. Economics, Management, and Financial Markets, 14, 44–49.
Ulucak, R., Koçak, E., Erdoğan, S., & Kassouri, Y. (2020). Investigating the non-linear effects of globalization on material consumption in the EU countries: Evidence from PSTR estimation. Resour Policy. https://doi.org/10.1016/j.resourpol.2020.101667.
United Nations. (2000). United Nations Millennium Declaration: Resolution adapted by the General Assembly. Gen Assem 9.
United Nations. (2019a). World economic situation and prospects.
United Nations. (2019b). The sustainable development goals report 2019. United Nations Publ issued by Dep Econ Soc Aff 64.
Vochozka, M., Horák, J., & Šuleř, P. (2019a). Equalizing seasonal time series using artificial neural networks in predicting the Euro–Yuan exchange rate. Journal of Risk and Financial Management, 12, 76. https://doi.org/10.3390/jrfm12020076.
Vochozka, M., Rowland, Z., & Šuleř, P. (2019b). The Specifics of valuating a business with a limited lifespan. AD ALTA-Journal of Interdisciplinary Research, 9, 339–345.
Wang, L., Vo, X. V., Shahbaz, M., & Ak, A. (2020). Globalization and carbon emissions: Is there any role of agriculture value-added, financial development, and natural resource rent in the aftermath of COP21? Journal of Environmental Management, 268, 110712. https://doi.org/10.1016/j.jenvman.2020.110712.
Wang, Y., & He, X. (2019). Spatial economic dependency in the Environmental Kuznets Curve of carbon dioxide: The case of China. Journal of Cleaner Production, 218, 498–510. https://doi.org/10.1016/j.jclepro.2019.01.318.
Woo, B., & Jun, H. J. (2020). Globalization and slums: How do economic, political, and social globalization affect slum prevalence? Habitat International, 98, 102152. https://doi.org/10.1016/j.habitatint.2020.102152.
Yao, S., Zhang, S., & Zhang, X. (2019). Renewable energy, carbon emission and economic growth: A revised Environmental Kuznets Curve perspective. Journal of Cleaner Production, 235, 1338–1352. https://doi.org/10.1016/j.jclepro.2019.07.069.
Zaidi, S. A. H., Zafar, M. W., Shahbaz, M., & Hou, F. (2019). Dynamic linkages between globalization, financial development and carbon emissions: Evidence from Asia Pacific Economic Cooperation countries. Journal of Cleaner Production, 228, 533–543. https://doi.org/10.1016/j.jclepro.2019.04.210.
Zhu, K., & Jiang, X. (2019). Slowing down of globalization and global CO2 emissions—A causal or casual association? Energy Economics, 84, 104483. https://doi.org/10.1016/j.eneco.2019.104483.
Zivot, E., & Andrews, D. W. K. (1992). Further evidence on the great crash, the oil price shock, and the unit root hypothesis. The Journal of Business and Economic Statistics, 10, 251–270. https://doi.org/10.1198/073500102753410372.
Acknowledgements
The authors would like to gratefully acknowledge the generous financial support of the NECE-UBI-Research Unit in Business Science and Economics, Portugal, Project No. UIDB/04630/2020, sponsored by the Portuguese Foundation for the Development of Science and Technology, Portugal, as well as the financial support of Santander Universities through “Scholarships BID/UBI-Santander Universities/2018”. We would also like to express our thanks to the anonymous reviewers for their helpful and invaluable comments and suggestions.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Leal, P.H., Marques, A.C. & Shahbaz, M. The role of globalisation, de jure and de facto, on environmental performance: evidence from developing and developed countries. Environ Dev Sustain 23, 7412–7431 (2021). https://doi.org/10.1007/s10668-020-00923-7
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10668-020-00923-7