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

Dogan, Buhari; Madaleno, Mara; Tiwari, Aviral Kumar; Hammoudeh, Shawkat

doi:10.1007/s11356-019-07371-5

Research Article
Published: 07 February 2020

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

Buhari Dogan¹,
Mara Madaleno ORCID: orcid.org/0000-0002-4905-2771²,
Aviral Kumar Tiwari³ &
Shawkat Hammoudeh⁴

Environmental Science and Pollution Research volume 27, pages 13735–13772 (2020)Cite this article

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Abstract

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.

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Notes

The only exception is Gozgor and Can (2017); however, it explores the same question but is related to China only.
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.
We thank the reviewer who asked us to include these new estimates into our results, which will be used for robustness check.
This is known in the literature as the Powell (2015) method, although it has been developed by Graham et al. and published in 2018.
Tables 10, 14, and 18 present the equivalent results but for the high-income, lower middle-income, and upper midddle-income countries, respectively.

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Acknowledgments

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.

Funding

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.

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Affiliations

Economics, Süleyman Demirel University, Isparta, Turkey
Buhari Dogan
Research Unit on Governance, Competitiveness and Public Policies (GOVCOPP), Portugal, Campus Universitário de Santiago, Departamento de Economia, Gestão, Engenharia Industrial e Turismo (DEGEIT), University of Aveiro, 3810-193, Aveiro, Portugal
Mara Madaleno
Rajagiri Business School, Rajagiri Valley Campus, Kochi, India
Aviral Kumar Tiwari
Lebow College of Business, Drexel University, Philadelphia, PA, USA
Shawkat Hammoudeh

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Buhari Dogan
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Mara Madaleno
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Aviral Kumar Tiwari
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Shawkat Hammoudeh
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Responsible editor: Eyup Dogan

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). https://www.un.org/development/desa/dpad/wpcontent/uploads/sites/45/publication/WESP2018_Full_Web-1.pdf. (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)
Benin	Argentina	Australia
Bolivia	Brazil	Austria
Cote d’lvoire	China	Canada
Cameroon	Colombia	Chile
Congo dem.	Costa Rica	Denmark
Algeria	Cuba	Spain
Egypt rep.	Dominician rep.	Finland
Gabon	Ecvador	France
Ghana	Jamaica	United Kingdom
Guatemala	Mexico	Greece
Honduras	Malaysia	Iceland
Indonesia	Panama	Israel
India	Thailand	Italy
Iraq	Tunisia	Japan
Kenya	Turkey	South Korea
Morocco		Netherlands
Nigeria		Norway
Nicaragua		Oman
Pakistan		Portugal
Sudan		Singapore
Senegal		Sweden
El Salvador		Trinidad and Tabago
Togo		Uruguay
		United States
		Ireland

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Dogan, B., Madaleno, M., Tiwari, A.K. et al. Impacts of export quality on environmental degradation: does income matter?. Environ Sci Pollut Res 27, 13735–13772 (2020). https://doi.org/10.1007/s11356-019-07371-5

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Received: 15 May 2019
Accepted: 09 December 2019
Published: 07 February 2020
Issue Date: April 2020
DOI: https://doi.org/10.1007/s11356-019-07371-5

Keywords

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

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O18
F18
C33

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Appendix 1

Appendix 1

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