The Impact of Trade Openness on Environmental Pollution

Abstract

This chapter analyzes the impact of trade openness on environmental pollution in the newly industrialized countries that have focused on trade over the period 1971-2010 by using recently developed panel unit root, cointegration, and causality tests. The results indicate a cointegration relationship between the variables. The results also show that trade openness increases carbon dioxide emissions with the elasticity of 0.53 and there is a Granger causality running from trade openness to carbon dioxide emissions in the long run. These findings may provide some policy implications. Without taking into account impact of trade on pollutions, optimistic environmental Kuznets curve hypothesis would be invalid. Therefore, policymakers who decide on environment policies should pay attention to not only growth effects but also trade effects on pollutions. Future empirical analysis would expose the new evidences for governmental policies and environmental regulations to change these effects positively.

Unveiling the liaison between human capital, trade openness, and environmental sustainability for BRICS economies: Robust panel‐data estimation

“…Keeping all else constant, a 1% increase in trade openness increases carbon emissions by 0.3915% and 0.2461%, respectively. Our results are congruent with Saud et al (2022) for BRI, Solarin et al (2017) for Ghana, Farhani and Ozturk (2015) for Tunisia, Ertugrul et al (2016) for developing countries, I. Ozturk and Acaravci (2013) for Turkey, and Cetin et al (2014) for 10 newly industrialized countries. Other studies, such as Dogan et al (2015) for OECD countries, Saud, Chen, and Haseeb (2019) for BRI countries, Javid and Sharif (2016) for Pakistan; Al‐Mulali et al (2015) for Europe, and Dogan and Turkekul (2015) for the USA, found a negative relationship between trade openness and CO 2 emissions.…”

How renewable energy and service growth influence environmental quality: Evidence from a sustainable development perspective

“…Moreover, their outcomes show a two‐way causality between clean energy and CO 2 . Çetin et al (2015) or Ben Jebli et al (2016) analyzed the link between CO 2 , energies, GDP, and trade for the 25 OECD states (or just Turkey, for that matter) spanning the period from 1980 to 2010 through the cointegration procedures. The authors attempted to confirm the strength of the EKC hypothesis.…”

The nexus between eco‐friendly technology and environmental degradation in India: Does the N or inverted N‐shape load capacity curve(LCC) hypothesis hold?

“…It is argued by Panayotou (1993) that once a particular economic growth level has been attained, the environmental quality level starts to increase by reducing pollution, whereas the increased economic growth in the initial stage may deteriorate the environment, which is called EKC. Moreover, the role of economic growth in the environmental degradation function is undeniable in the literature (Cetin et al, 2015;Cetin et al, 2018;Çetin et al, 2022;Çetin & Ecevit, 2015;Ozturk et al, 2022).…”

“…Similarly, (Genç et al, 2022) validated the conventional EKC hypothesis for Turkey (Magazzino et al, 2023) for the 9 advanced economies in the post‐1950s. However, a U‐shape association between economic growth and pollution has been delineated by (Voumik et al, 2022) for European Union (EU), (Onifade, 2022) for leading oil‐producing African economies, (Cetin et al, 2015) for Turkey and (Villanthenkodath et al, 2021) for India. Moreover, moving beyond the inverted U‐shape or U‐shape relationship between economic growth and environmental pollution, few studies examined the link with cubic income specification.…”