Springer Nature is making Coronavirus research free. View research | View latest news | Sign up for updates

Impacts of export quality on environmental degradation: does income matter?

  • 20 Accesses


International trade in connection with carbon dioxide (CO2) emissions has been well studied, but export quality in this context has not widely been considered yet. Hence, in this study, we fill this gap by exploring the effects of export quality, economic growth, urbanization, trade openness, and total energy use on CO2 emissions in 63 developed and developing countries around the world. To achieve our objectives, we have used the recent techniques of panel quantile estimators as proposed in Powell (2016) and Canay. Econ J 14 (3): 368-386, (2011), along with several other estimation methods. Our overall empirical evidence shows that the existence of the Environmental Kuznets Curve (EKC) hypothesis depends heavily on the estimation method and on the development stage of the economies considered. Emissions are influenced by the same factors as in the EKC specification, as explored in sensitivity analysis. The results from the panel quantile regression model show that economic growth and total energy use are highly CO2 emissions conducive, while urbanization increases environmental degradation at the higher quantiles, as does export quality, depending on the countries’ income levels. Consequently, improvements in export product quality should be prioritized through the production of cleaner products mainly in the lower and upper middle-income countries. There should also be a decrease in total energy use in countries of all income levels. Particularly, policy makers should promote a decrease in export products intensive of fossil fuel energy by prioritizing the use of more renewable energy sources.

This is a preview of subscription content, log in to check access.


  1. 1.

    The only exception is Gozgor and Can (2017); however, it explores the same question but is related to China only.

  2. 2.

    Even though rich countries tend to produce higher quality goods, the concepts of “quality” and “sophisticated” are quite different. Quality refers to the relative prices of a country’s product varieties in the respective product groups. The sophistication of a product, as Hausmann et al. (2007) indicated, is determined by the composition of the total export basket.

  3. 3.

    We thank the reviewer who asked us to include these new estimates into our results, which will be used for robustness check.

  4. 4.

    This is known in the literature as the Powell (2015) method, although it has been developed by Graham et al. and published in 2018.

  5. 5.

    Tables 10, 14, and 18 present the equivalent results but for the high-income, lower middle-income, and upper midddle-income countries, respectively.


  1. Adu DT, Denkyirah EK (2017) Economic growth and environmental pollution in West Africa:testing the environmental Kuznets curve hypothesis. Kasetsart J Soc Sci.

  2. Ahmed K, Shahbaz M, Kyophilavong P (2016) Revisiting the emissions-energy-trade nexus: evidence from the newly industrializing countries. Environ Sci Pollut Res 23(8):7676–7691

  3. Ahmed K, Bhattacharya M, Shaikh Z, Ramzan M, Ozturk I (2017) Emission intensive growth and trade in the era of the Association of Southeast Asian Nations (ASEAN) integration: an empirical investigation from ASEAN-8. J Clean Prod 154:530–540.

  4. Alam MS, Paramati SR (2015) Do oil consumption and economic growth intensify environmental degradation? Evidence from developing economies. Appl Econ 47(48):5186–5203

  5. Al-mulali U (2012) Factors affecting CO2 emission in the Middle East: a panel data analysis. Energy 44:564–569

  6. Al-Mulali U, Ozturk I, Lean HH (2015) The influence of economic growth, urbanization, trade openness, financial development, and renewable energy on pollution in Europe. Natural hazards, forthcoming. Available from: article/

  7. Al-mulali U, Weng-Wai C, Sheau-Ting L, Mohammed AH (2015b) Investigating the environmental Kuznets curve (EKC) hypothesis by utilizing the ecological footprint as an indicator of environmental degradation. Ecological Indicators 48:315–323

  8. Al-mulali U, Tang CF, Ozturk I (2015c) Does financial development reduce environmental degradation? Evidence from a panel study of 129 countries. Environ Sci Pollut Res 22(19):14891–14900.

  9. Apergis N (2016) Environmental Kuznets curves: New evidence on both panel and country level CO2 emissions. Energy Econ 54:263–271.

  10. Apergis N, Payne JE (2010) The causal dynamics between coal consumption and growth: evidence from emerging market economies. Appl Energy 87(6):1972–1977.

  11. Apergis N, Can M, Gozgor G, Lau CKM (2018) Effects of export concentration on CO2 emissions in developed countries: an empirical analysis. Environ Sci Pollut Res 25(14):14106–14116.

  12. Arouri M, El H, Youssef AB, M'henni H, Rault C (2012) Energy consumption, economic growth and CO2 emissions in Middle East and north African countries. Energy policy 45:342–349.

  13. Atici.C. (2009) Carbon emissions in central and Eastern Europe: environmental Kuznets curve and implications for sustainable development. Sustain Dev 17(3):155–160

  14. Azam M, Khan AQ, Zaman K, Ahmad M (2015) Factors determining energy consumption: evidence from Indonesia. Malaysia and Thailand Renewable Sustainable Energy Rev 42:1123–1131.

  15. Bento JPC, Moutinho V (2016) CO2 emissions, non-renewable and renewable electricity production, economic growth and international trade in Italy. Renewable sustainable energy rev 55:142–155.

  16. Can M, Gozgor G (2017) The impact of economic complexity on carbon emissions: evidence from France. Environ Sci Pollut Res 24(19):16364–16370.

  17. Canay IA (2011) A simple approach to quantile regression for panel data. Econom J 14(3):368–386.

  18. Chandia KE, Gul I, Aziz S, Sarwar B, Zulfiqar S (2018) An analysis of the association among carbon dioxide emissions, energy consumption and economic performance: an econometric model. Carbon Manage.

  19. Chen W, Lei Y (2018) The impacts of renewable energy and technological innovation on environment-energy-growth nexus: new evidence from a panel quantile regression. Renew Energy 123:1–14.

  20. Cole, M.A., Elliott, R.J.R. and Azhar, A.K. (2000), “The determinants of trade in pollution intensive industries: North-South evidence”, Mimeo, University of Birmingham, Birmingham, available at:

  21. Costa-Font J, Hernandez-Quevedo C, Sato A (2018) A health “Kuznets” curve? Cross sectional and longitudinal evidence on concentration indices. Soc Indic Res 136(2):439–452.

  22. Destek MA, Balli E, Manga M (2016) The relationship between CO2 emission, energy consumption, urbanization and trade openness for selected CEECs. Research in World Economy 7(1)

  23. Doğan B, Değer O (2018) The role of economic growth and energy consumption on CO2 emissions in E7 countries. Theoretical and Applied Economics 2(615):231–246

  24. Dogan E, Turkekul B (2016) CO2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environ. Sci. Pollut. Res 23(2):1203–1213.

  25. Dogan E, Seker F, Bulbul S (2015) Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: a panel study of OECD countries. Curr Issue Tour 20(16):1701–1719

  26. Doğan B, Saboori B, Can M (2019) Does economic complexity matter for environmental degradation? An empirical analysis for different stages of development. Environ Sci Pollut Res.

  27. Fan Y, Liu LC, Wu G, Wei YM (2006) Analyzing impact factors of CO2 emissions using the STIRPAT model. Environ Impact Assess Rev 26(4):377–395.

  28. Fang J, Gozgor G, Lu Z, Wu W (2019) Effects of the export product quality on carbon dioxide emissions: evidence from developing economies. Environ Sci Pollut Res.

  29. Farhani S, Rejeb JB (2012) Energy consumption, economic growth and CO2 emissions: evidence from panel Ddata for Mena region. Int J Energy Econ Policy 2(2):71–81

  30. Feenstra RC, Romalis J (2014) International prices and endogenous quality. Q J Econ 129(2):477–527.

  31. Gill AR, Viswanathan KK, Hassan S (2018) A test of environmental Kuznets curve (EKC) for carbon emission and potential of renewable energy to reduce green houses gases (GHG) in Malaysia. Environ., Dev. Sustainability 20(3):1103–1114.

  32. Govindaraju VGRC, Tang CF (2013) The dynamic links between CO2 emissions, economic growth and coal consumption in China and India. Appl Energy 104:310–318.

  33. Gozgor G (2017) Does trade matter for carbon emissions in OECD countries? Evidence from a new trade openness measure. Environ Sci Pollut Res 24(36):27813–27821.

  34. Gozgor G, Can M (2016a) Effects of the product diversification of exports on income at different stages of economic development. Eurasian Bus Rev 6(2):215–235.

  35. Gozgor G, Can M (2016b) Export product diversification and the environmental Kuznets curve: evidence from Turkey. Environ Sci Pollut Res 23(21):21594–21603.

  36. Gozgor G, Can M (2017) Does export product quality matter for CO2 emissions? Evidence from China. Environ Sci Pollut Res 24(3):2866–2875.

  37. Graham BS, Hahn J, Poirier A, Powell JL (2018) A quantile correlated random coefficients panel data model. J Econom.

  38. Grossman GM, Krueger AB (1997) Economic growth and the environment. Q J Econ 110(2):353–377.

  39. Guo L (2014) CO2 emissions and regional income disparity: evidence from China. Singapore econ. Rev. 59(01):145–165.

  40. Hallak JC (2006) Product quality and the direction of trade. J Int Econ 68(1):238–265.

  41. Hallak JC, Schott PK (2011) Estimating cross-country differences in product quality. Q J Econ 126(1):417–474.

  42. Harding T, Javorcik BS (2012) Foreign direct investment and export upgrading. Rev Econ Stat 94(4):964–980.

  43. Hasanov FJ, Liddle B, Mikayilov JI (2018) The impact of international trade on CO2 emissions in oil exporting countries: territory vs consumption emissions accounting. Energy Econ 74:343–350.

  44. Hausmann R, Hwang J, Rodrik D (2007) What you export matters. J Econ Growth 12(1):1–25.

  45. Helble MC, Okubo T (2008) Heterogeneous quality firms and trade costs. World Bank Policy Res., Working Paper, No. 4550.

  46. Henn C, Papageorgiou C, Romero J, Spatafora N (2017) Export quality in advanced and developing economies: evidence from a new data set. World Bank Policy Research Working Paper No:8196

  47. Hill RJ, Magnani E (2002) An exploration of the conceptual and empirical basis of the environmental Kuznets curve, Australian econ. Papers, June, pp 239–254.

  48. Hwang J (2007) Introduction of new goods. Job Market Paper, Department of Economics, Harvard University, Convergence and Growth

  49. Ibrahim MH, Law SH (2015) Institutional quality and CO2 emission–trade relations: 8 evidence from sub-Saharan Africa. South African Journal of Economics 84(2):323–340

  50. Ibrahim MH, Rizvi SAR (2015) Emissions and trade in southeast and east Asian countries: a panel co-integration analysis. International Journal of Climate Change Strategies and Management 7(4):460–475

  51. International Monetary Fund, IMF (2014) Sustaining Long–Run Growth and Macroeconomic Stability in Low–Income Countries–the Role of Structural Transformation and Diversification. IMF Policy Paper, March 2014, Washington, D.C.: International Monetary Fund

  52. Jayanthakumaran K, Liu Y (2012) Openness and the environmental Kuznets curve: evidence from China. Econ Model 29(3):566–576.

  53. Jayanthakumaran K, Verma R, Liu Y (2012) CO2 emissions, energy consumption, trade and income: a comparative analysis of China and India. Energy Policy 42:450–460.

  54. Jebli MB, Youssef SB, Ozturk I (2016) Testing environmental Kuznets curve hypothesis: the role of renewable and non-renewable energy consumption and trade in OECD countries. Ecol Indic 60:824–831.

  55. Kahia M, Ben Jebli M, Belloumi M (2019) Analysis of the impact of renewable energy consumption and economic growth on carbon dioxide emissions in 12 MENA countries. Clean Techn Environ Policy 21:871–885.

  56. Kanjilal K, Ghosh S (2013) Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks. Energy Policy 56(C):509–515.

  57. Kasman A, Duman YS (2015) CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Econ Model 44:97–103.

  58. Katircioglu ST (2014) Testing the tourism-induced EKC hypothesis: the case of Singapore. Econ Model 41:383–391.

  59. Khandelwal A (2010) The long and short (of) quality ladders. Rev Econ St 77(4):1450–1476.

  60. Kijima Y, Ito Y, Otsuka K (2010) On the possibility of a lowland Rice green revolution in sub-Saharan Africa: evidence from the sustainable irrigated agricultural development (SIAD) project in eastern Uganda, JICA-RI working paper 25, Japan International Cooperation Agency research. Institute, Japan

  61. Kohler M (2013) CO2 emissions, energy consumption, income and foreign trade: a south African perspective. Energy Policy 63:1042–1050

  62. Kraft J, Kraft A (1978) On the relationship between energy and GNP. J Energy and Dev 3(2):401–403

  63. Kyoto Protocol Summit (1997). Kyoto Protocol to the United Nations framework convention on climate change.

  64. Li J, Song H, Geng D (2008) Causality relationship between coal consumption and GDP: difference of major OECD and non-OECD countries. Appl Energy 85:421–429.

  65. Li T, Wang Y, Zhao D (2016) Environmental Kuznets curve in China: new evidence from dynamic panel analysis. Energy Policy 91:138–147.

  66. Liu H, Kim H, Choe J (2018) Export diversification, CO2 emissions and EKC: panel data analysis of 125 countries. Asia-Pac J Reg sci 3:361–393.

  67. Managi S, Jena PR (2008) Environmental productivity and Kuznets curve in India. Ecol Econ 65(2):432–440.

  68. Mardani A, Streimikiene D, Cavallaro F, Loganathan N, Khoshnoudi M (2019) Carbon dioxide (CO2) emissions and economic growth: a systematic review of two decades of research from 1995 to 2017. Sci Total Environ 649:31–49.

  69. Minondo A (2010) Exports’ quality-adjusted productivity and economic growth. Journal ofInternational Trade and Economic Development 19(2):257–287

  70. Moghadam HE, Dehbashi V (2018) The impact of financial development and trade on environmental quality in Iran. Emp Econ 54(4):1777–1799.

  71. Nasir M, Rehman F-U (2011) Environmental Kuznets curve for carbon emissions in Pakistan: an empirical investigation. Energy Policy 39(3):1857–1864.

  72. Nasreen S, Anwar S, Ozturk I (2017) Financial stability, energy consumption and environmental quality: evidence from south Asian economies. Renew Sust Energ Rev 67:1105–1122.

  73. Neve M, Hamaide B (2017) Environmental Kuznets curve with adjusted net savings as a trade-off between environment and development. Australian econ. Papers 56(1):39–58.

  74. Onafowora OA, Owoye O (2014) Bound testing approach to analysis of the environment Kuznets curve hypothesis. Energy Econ 44:47–62.

  75. Orobu CO, Omotor DG (2011) Environmental quality and economic growth: searching for environmental kuznets curves for air and water pollutants in Africa. Energy Policy 39(7):4178–4188.

  76. Ozturk I, Acaravci A (2013) The long-run and causal analysis of energy, growth, openness and financial development on carbon emissions in Turkey. Energy Econ 36:262–267.

  77. Pao H-T, Fu H-C, Tseng C-L (2012) Forecasting of CO2 emissions, energy consumption and economic growth in China using an improved Grey model. Energy 40(1):400–409.

  78. Paris Climate Change Conference (2015). Twenty-first session of the Conference of the Parties (COP) and the eleventh session of the Conference of the Parties. Meeting of the Parties to the Kyoto Protocol (CMP). From 30 November to 11 December 2015, Paris, France.

  79. Park Y, Meng F, Baloch MA (2018) The effect of ICT, financial development, growth, and trade openness on CO2 emissions: an empirical analysis. Environ Sci Pollut Res 25:30708–30719.

  80. Pata UK (2018) Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: testing EKC hypothesis with structural breaks. J Clean Prod 187:770–779.

  81. Powell, D. 2015. "Quantile Regression with Nonadditive Fixed Effects" Quantile Treatment Effects (2015). Available at:

  82. Powell D (2016) Quantile regression with non-additive fixed effects. RAND working paper.

  83. Rafindadi AA (2016) Does the need for economic growth influence energy consumption and CO2 emissions in Nigeria? Evidence from the innovation accounting test. Renew Sust Energ Rev 62:1209–1225

  84. Rasoulinezhad E, Saboori B (2018) Panel estimation for renewable and non-renewable energy consumption, economic growth, CO2 emissions, the composite trade intensity, and financial openness of the commonwealth of independent states. Environ Sci Pollut Res 25(18):17354–17370

  85. Raza SA, Shah N (2018) Testing environmental Kuznets curve hypothesis in G7 countries: the role of renewable energy consumption and trade. Environ. Sci. Pollut. Res:1–13.

  86. Rodrik D (2006) What’s so special about China’s export? China World Econ 14(5):1–19.

  87. Saidi K, Mbarek MB (2016) The impact of income, trade, urbanization, and financial development on CO2 emissions in 19 emerging economies. Environ Sci Pollut Res 24(14):12748–12757

  88. Saint-Paul, G., 1994. Ch.2 . In: Goldin, I., Winter, A.L. (Eds.), The economics of sustainable development. Cambridge Univ. Press, Cambridge, 47–50

  89. Sapkota P, Bastola U (2017) Foreign direct investment, income, and environmental pollution in developing countries: panel data analysis of Latin America. Energy Econ 64:206–212.

  90. Shafik, N. (1994). Economic Development and Environmental Quality: An Econometric Analysis. Oxford Economic Papers, 46, Supplement_1, 757–773.

  91. Shahbaz M, Mahali MK, Shah SH, Sato JR (2016) Time-varying analysis of CO2 emissions, energy consumption, and economic growth Nexus: statistical experience in next 11 countries. Energy Policy 98:33–48.

  92. Sharma SS (2011) Determinants of carbon dioxide emissions: empirical evidence from 69 countries. Appl Energy 88(1):376–382.

  93. Sinha A, Bhattacharya J (2016) Confronting environmental quality and societal aspects: an environmental Kuznets curve analysis for Indian cities. Int J Green Econ 10(1):69–88.

  94. Sinha A, Sen S (2016) Atmospheric consequences of trade and human development: a case of BRIC countries. Atmosph Poll Res 7(6):980–989.

  95. Sutton J, Trefler D (2011) Deductions from the export basket: capabilities, wealth and trade, NBER working paper no. 16834

  96. Tang CF, Tan BW (2015) The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy 79:447–454.

  97. Tiba S, Omri A, Frikha M (2015) The four-way linkages between renewable energy, environmental quality, trade and economic growth: a comparative analysis between high and middle-income countries. Energy Systems 7(1):103–144

  98. Tisdell C (2001) Globalisation and sustainability: environmental Kuznets curve and the WTO. Ecol Econ 39(2):185–196.

  99. United Nations (1997) Kyoto protocol to the United Nations framework convention on climate change. United Nations

  100. United Nations / Framework Convention on Climate Change (2015) Adoption of the Paris agreement, 21st conference of the parties. United Nations, Paris

  101. Wang Z, Liu W (2015) Determinants of CO2 emissions from household daily travel in Beijing. China: Individual Travel Characteristic Perspectives Appl Energy 158:292–299.

  102. Wang S, Zhou C, Li G, Feng K (2016) CO2, economic growth, and energy consumption in China’s provinces: investigating the spatiotemporal and econometric characteristics of China’s CO2 emissions. Ecol Indic 69:184–195.

  103. World Bank, 2016. World development indicators on CD-ROM, Washington DC

  104. Xu Q, Dong Y-X, Yang R (2018) Urbanization impact on carbon emissions in the Pearl River Delta region: Kuznets curve relationships. J Clean Prod 180:514–523.

  105. York R (2007) Demographic trends and energy consumption in European Union nations, 1960–2025. Soc Sci Res 36(3):855–872.

  106. Zerbo E (2017) Income-environment relationship in sub-Saharan African countries: further evidence with trade openness. Environ Sci Pollut Res 24(19):16488–16502

  107. Zhang S, Liu X, Bae J (2017) Does trade openness affect CO2 emissions: evidence from ten newly industrialized countries? Environ Sci Pollut Res 24(21):17616–17625

  108. Zhu S-J, Fu X-O (2013) Drivers of export upgrading. World Dev 51:221–233

  109. Zhu H, Duan L, Guo Y, Yu K (2016) The effects of FDI, economic growth and energy consumption on carbon emissions in ASEAN-5: evidence from panel quantile regression. Econ Model 58:237–248

  110. Zhu H, Xia H, Guo Y, Peng C (2018) The heterogeneous effects of urbanization and income inequality on CO2 emissions in BRICS economies: evidence from panel quantile regression. Environ Sci Pollut Res 25(17):17176–17193.

  111. Zoundi Z (2017) CO2 emissions, renewable energy and the environmental Kuznets curve, a panel cointegration approach. Renew Sust Energ Rev 72:1067–1075.

Download references


Mara Madaleno would like to acknowledge the support she received (in part) from the Research Unit on Governance, Competitiveness and Public Policy-GOVCOPP. Any persistent errors are sole responsibility of the authors. We also are thankful for the useful comments of the reviewers and the editor, which helped us to clearly improve this work.


This work was financially supported by the research unit on Governance, Competitiveness and Public Policy (UID/CPO/04058/2019), funded by national funds through FCT-Fundação para a Ciência e a Tecnologia.

Author information

Correspondence to Mara Madaleno.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Responsible editor: Eyup Dogan

Appendix 1

Appendix 1

Grouping the countries according to the level of development is based on the United Nations (UN) World Economic Situation and Prospects (2018) report. The list of the countries is presented in Appendix 1.

World Economic Situation and Prospects (2018). (Access:07.03.2019).

Lower middle-income countries (less and $4035)Upper middle-income countries ($4036 and $12,475)High-income countries ($12,476 or more)
Cote d’lvoireChinaCanada
Congo dem.Costa RicaDenmark
Egypt rep.Dominician rep.Finland
GhanaJamaicaUnited Kingdom
KenyaTurkeySouth Korea
Morocco Netherlands
Nigeria Norway
Nicaragua Oman
Pakistan Portugal
Sudan Singapore
Senegal Sweden
El Salvador Trinidad and Tabago
Togo Uruguay
  United States

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Dogan, B., Madaleno, M., Tiwari, A.K. et al. Impacts of export quality on environmental degradation: does income matter?. Environ Sci Pollut Res (2020).

Download citation


  • Export Quality Index
  • Total energy use
  • Trade openness
  • Environmental Kuznets curve
  • Panel quantile regressions
  • Income levels

JEL classification

  • Q53
  • Q56
  • O13
  • O18
  • F18
  • C33