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Export diversification, CO2 emissions and EKC: panel data analysis of 125 countries

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Abstract

This study explores the applicable stipulation of cross-country regression analysis of international trade and carbon emissions using data on export diversification across 125 countries from 2000 to 2014 at the HS4 digit of disaggregation. Export diversification is subdivided into vertical and horizontal diversification in order to justify its correlation with pollution emission through scale effect, technique effect as well as composition effect. We use an empirical regression equation incorporating Driscoll and Kraay standard errors to rectify the possible problems of heteroscedasticity as well as auto-correlated issues. Besides, interaction terms of economic development and export diversification facilitate the comparison among different income levels: low-income countries illustrate U-shaped relationship between economic development and CO2 emissions, while OECD countries still keep an inverted U-shaped EKC curve which is unanimous with the outcome of 125 countries in general.

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Authors and Affiliations

  1. College of Agriculture and Life Science, Seoul National University, Seoul, South Korea

    Hongbo Liu & Hanho Kim

  2. U.S. Department of Agriculture, Washington, DC, USA

    Justin Choe

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  1. Hongbo Liu
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  2. Hanho Kim
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Correspondence to Hongbo Liu.

Appendices

Appendix 1: Calculation of Herfindahl–Hirschman index

The normalized Herfindahl index, ranges between zero and one is given as follows:

$$ H_{t} = \frac{{\sum\limits_{k} {\left( {S_{k} } \right)^{2} - \frac{1}{n}} }}{{1 - \frac{1}{n}}},\quad S_{k} = \frac{{X_{k} }}{{\sum\limits_{k = 1}^{n} {X_{k} } }}. $$

Sk is the share of export line k (with amount exported in total exports Xk), and n is the number of export lines, k is the share of line k in total exports, n is the number of export lines, commodity uses 4-digit HS code

Appendix 2: Country list

Country list of different developing stages (Gozgor and Can 2016a).

2.1 Low-income countries ($1045 or less)

Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, the Central African Republic, Chad, Comoros, Congo Democratic Republic, Ethiopia, the Gambia, Guinea, Guinea-Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, Sierra Leone, Tajikistan, Tanzania, Togo, Uganda, and Zimbabwe.

figure a

2.2 Lower-middle income countries ($1046–$4125)

Armenia, Bolivia, Cameroon, Cape Verde, Congo Republic, Cote D’Ivoire, Djibouti, Egypt, El Salvador, Georgia, Ghana, Guatemala, Honduras, India, Indonesia, Kyrgyz Republic, Lao PDR, Mauritania, Moldova, Mongolia, Morocco, Nigeria, Pakistan, Paraguay, the Philippines, Sao Tome and Principe, Senegal, Sri Lanka, Sudan, Syria, Ukraine, Uzbekistan, Vietnam, Yemen, and Zambia.

figure b

2.3 Upper-middle income countries ($4126–$12,745)

Albania, Angola, Argentina, Azerbaijan, Belarus, Belize, Bosnia and Herzegovina, Brazil, Bulgaria, China, Colombia, Costa Rica, Dominica, the Dominican Republic, Ecuador, Fiji, Gabon, Grenada, Hungary, Iran, Iraq, Jamaica, Jordan, Kazakhstan, Lebanon, Macedonia FYR, Malaysia, Maldives, Mauritius, Mexico, Panama, Peru, Romania, Serbia, South Africa, St. Lucia, St. Vincent and the Grenadines, Suriname, Thailand, Tunisia, Turkey, Turkmenistan, and Venezuela.

figure c

2.4 High-income countries (non-OECD) ($12,746 or more)

Antigua and Barbuda, the Bahamas, Bahrain, Barbados, Bermuda, Croatia, Cyprus, Equatorial Guinea, Hong Kong SAR, Kuwait, Latvia, Lithuania, Macao SAR, Malta, Oman, Qatar, Russia, Saudi Arabia, Singapore, St. Kitts and Nevis, Trinidad and Tobago, and Uruguay.

figure d

2.5 High-income countries (OECD members) ($12,746 or more)

Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Korea Republic, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

figure e

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Liu, H., Kim, H. & Choe, J. Export diversification, CO2 emissions and EKC: panel data analysis of 125 countries. Asia-Pac J Reg Sci 3, 361–393 (2019). https://doi.org/10.1007/s41685-018-0099-8

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