The Shape of Environmental Kuznets Curve: The Dynamic and Cross-country Variation

Abstract

The goal of sustainable economic growth is achievable only when economic growth and development occur without environmental degradation. The Environmental Kuznets Curve (EKC) hypothesis explains the inverted U-shaped association between economic activity and environmental degradation. The primary objective of this study is to empirically test the truth behind the EKC hypothesis. In addition to that, the study is intended to analyze the variation in the shape of the EKC; that is, cross-country variation, as well as variation over time. In order to achieve the stated objectives, the study analyzed a long list of countries (75 countries) for a fairly long period of time (1960–2016, i.e., 57 years). The empirical literature in this area estimated the EKC using some form of a polynomial regression equation. This study also used a similar kind of modeling structure to understand cross-country as well as dynamic variation in the shape of the EKC. In this study, firstly the selected countries are grouped on the basis of the shape of the EKC. Secondly, the dynamic behavior of each parameter in the polynomial equation is analyzed to understand the degree of association between economic activity and environmental degradation. This study suggests a decline in degree of association between the two over time.

Citation

Maji, K. (2022), "The Shape of Environmental Kuznets Curve: The Dynamic and Cross-country Variation", Chakraborty, C. and Pal, D. (Ed.) Environmental Sustainability, Growth Trajectory and Gender: Contemporary Issues of Developing Economies, Emerald Publishing Limited, Leeds, pp. 75-88. https://doi.org/10.1108/978-1-80262-153-220221007