Relationship between economic growth and mismanaged e-waste: Panel data evidence from 27 EU countries analyzed under the Kuznets curve hypothesis

Abstract

The volumes of waste electrical and electronic equipment are rapidly increasing worldwide. While the relationship between e-waste generation and economic growth has previously been studied, mismanaged e-waste has received little attention. This study examines the environmental Kuznets curve (EKC) hypothesis between economic growth and mismanagement e-waste for 27 European countries over the period 2008–2016. Previous studies on ECK employed waste generation as a proxy for environmental degradation, while this work uses mismanaged e-waste, namely uncollected and non-recycled/non-reused e-waste. Two different econometric methods (dynamic and static) are applied; the first method uses Fully Modified Ordinary Least Square (FMOLS) and Dynamic Ordinary Least Square (DOLS) as panel integration estimation, while the second method employs traditional Pooled Ordinary Least Square (OLS) and Robust Least Squares (MM-estimation). The advantages of the first method are its ability to avoid the problems of endogeneity and serial correlation, while the second method is applied to check the robustness of the results and to disclose whether the data set suffers from outliers. All estimators used consistently identified the inverted U-shaped relationship between economic growth and mismanaged e-waste, as postulated by the EKC hypothesis: quantities of mismanaged e-waste increase along economic growth up to a certain economic development stage (turning point), but then mismanaged e-waste quantities decline while economy continues to grow. A unidirectional causality relationship running from economic growth to uncollected and non-recycled/non-reused e-waste was found. Furthermore, the results reveal that mismanaged e-waste increases with higher credit to private sector.