International Economics

<< N°158

Issue Q2 2019  
Testing the globalization-driven carbon emissions hypothesis: International evidence  
Muhammad Shahbaz
Mantu Kumar Mahalik
Syed Jawad Hussain Shahzad
Shawkat Hammoudeh
We empirically investigate the dynamic relationship between globalization and CO2emissions for 87 (high, middle and low-income) countries. We utilize the cross-correlation approach to examine the well-known EKC hypothesis between globalization and environmental degradation. The results validate the inverted U-shaped EKC hypothesis for 16 (approximately 18%) from the high- and middle-income countries only, thereby highlighting that a rise in globalization will decrease carbon emissions for these countries in the future. On contrary, the results also confirm the U-shaped relationship between globalization and environmental degradation for 8% of the countries. The remaining countries do not have a U- or an inverted U-shaped relationship between globalization and CO2 emissions. Policy implications are also discussed.

Globalization ; Carbon emissions ; Cross-correlation ; EKC ; Keywords
F6 ; Q5 ; Q0 ; JEL classification
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