Investigation of Environmental Kuznets Curve Hypothesis with Non-Additive Fixed Effect Panel Quantile Method

Article Information
Journal: Business and Economics Research Journal
Title of Article: Investigation of Environmental Kuznets Curve Hypothesis with Non-Additive Fixed Effect Panel Quantile Method
Author(s): Selahattin Guris, Nazan Sak
Volume: 10
Number: 2
Year: 2019
Page: 327-339
ISSN: 2619-9491
DOI Number: 10.20409/berj.2019.171
Increased economic growth causes an increase in the amount of harmful gases released by the use of fossil fuels due to the increase in production amount. This effect, known as the greenhouse gas effect, is recognized as one of the main causes of global warming worldwide. According to the environmental Kuznets curve, economic growth increases the release of environmental pollutants, but after a certain economic growth, the growth and development of countries, the increase of environmental awareness, the use of environmentally friendly technologies and renewable energy sources decrease the release of harmful substances. In this study, the factors affecting the carbon dioxide emission by using the data of the period of 1993-2014 of the 32 OECD countries were analyzed by non-additive fixed effect panel regression model. In the study, it was found that the increase in energy usage increased the amount of emission, but the rate of urbanization, renewable energy consumption, commercial openness and increase in financial development decreased the amount of emissions. As a result of the analysis, the validity of the Environmental Kuznets curve hypothesis in different quantiles in the OECD countries was examined and it was determined that the functional form of the relationship between the amount of carbon dioxide emission and economic growth was in N form. Although the functional shape of the Environmental Kuznets curve is N, it is found that there is no turning point in the models, but there is a twist point. The results show that the amount of emission at the twist point does not decrease, but continues to increase by changing the slope at this point.

Keywords: Panel Quantile Regression, Environmental Kuznets Curve, Non Additive Fixed Effect, Carbon Dioxide Emission, Economic Growth

JEL Classification: C31, C33, C51, Q43, Q56 Full Text