The Productive Capacity And Environment: Evidence From OECD Countries

Oluc, Ihsan and Ben Jebli, Mehdi and Can, Muhlis and Guzel, Ihsan and Brusselaers, Jan (2022): The Productive Capacity And Environment: Evidence From OECD Countries.

Abstract

There are many economic parameters that may affect environmental degradation. At the forefront of these parameters is the productive economic structures of the countries The present paper discusses the dynamic relationship between carbon dioxide (CO2) emissions, economic growth and productive capacity index (PCI) for a panel of 38 OECD countries spanning the period 2000-2018. The empirical study applied PMG-ARDL approach, panel cointegration techniques and Granger causality tests the examine the short and long-run association between the variables. The cross-sectional dependence test of Pesaran (2004) revealed the use of the second generation panel unit root tests (CADF and CIPS). The cointegration relationships between the variables are proved using Westerlund and Pedroni cointegration tests. The estimated coefficients of PMG-ARDL revealed that the environmental Kuznets curve (EKC) hypothesis is established. Besides, the empirical findings obtained from long-run estimation confirm that productive capacity has a significant role on increasing environmental quality.

• Item Type: MPRA Paper
• Language: English
• Keywords: Product Capacity Index; CO2 Emissions; Economic Complexity; Economic Structure; Environment
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy; F - International Economics > F1 - Trade; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology

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