Munich Personal RePEc Archive

Testing the Globalization-Driven Carbon Emissions Hypothesis: International Evidence

Shahbaz, Muhammad and Mahalik, Mantu Kumar and Hussain Shahzad, Syed Jawad and Hammoudeh, Shawkat (2019): Testing the Globalization-Driven Carbon Emissions Hypothesis: International Evidence.

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Abstract

We empirically investigate the dynamic relationship between globalization and CO2 emissions 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.

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