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Does trade openness affect CO2 emissions: evidence from ten newly industrialized countries?

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Abstract

This paper examines whether the hypothetical environmental Kuznet curve (EKC) exists or not and investigates how trade openness affects CO2 emissions, together with real GDP and total primary energy consumption. The study sample comprises ten newly industrialized countries (NICs-10) from 1971 to 2013. The results support the existence of hypothetical EKC and indicate that trade openness negatively and significantly affects emissions, while real GDP and energy do positive effects of emissions. Moreover, the empirical results of short-run causalities indicate feedback hypothetical linkage of real GDP and trade, unidirectional linkages from energy to emissions, and from trade to energy. The error correction terms (ECTs) reveal in the long run, feedback linkages of emissions, real GDP, and trade openness, while energy Granger causes emissions, real GDP, and trade, respectively. The study recommendations are that our policymakers should encourage and expand the trade openness in these countries, not only to restrain CO2 emissions but also to boost their growth.

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Authors and Affiliations

  1. School of International Economics and Business, Yeungnam University, 280 Daehak-Ro, Gyeongsan, Gyeongbuk, South Korea

    Shun Zhang, Xuyi Liu & Junghan Bae

  2. School of Business, Luoyang Normal University, 6# Jiqing RD, Luoyang City, Henan, People’s Republic of China

    Shun Zhang

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  1. Shun Zhang
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  2. Xuyi Liu
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  3. Junghan Bae
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Correspondence to Junghan Bae.

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Responsible editor: Philippe Garrigues

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Zhang, S., Liu, X. & Bae, J. Does trade openness affect CO2 emissions: evidence from ten newly industrialized countries?. Environ Sci Pollut Res 24, 17616–17625 (2017). https://doi.org/10.1007/s11356-017-9392-8

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  • DOI: https://doi.org/10.1007/s11356-017-9392-8

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