Relationship between Globalization and Environmental Degradation in Low Income Countries: An Application of Kuznet Curve

Abstract

Listen

Translate article

Objectives: This study aims to check the impact of globalization and macroeconomic variables on environment degradation in low income countries. This study also tested the existence of Kuznets curve. Methods/Statistical Analysis: Greenhouse gases emission is used as proxy of environment degradation. Panel data was taken from 1996 to 2015 for Zimbabwe, Burkina, Uganda, Tanzania, Malawi, Mali, Guinea, Gambia, Madagascar, Central Africa, Niger, Burundi, Faso, Rwanda, Senegal, Mozambique and Benin. After checking the cross sectional dependence, Cross Sectional Augmented Dickey Fuller (CADF) panel unit root test is used to check the stationary of the variables then Pedroni Panel CoIntegration Test and Fully Modified Ordinary Least Square (FMOLS) are applied. Findings: Co-integration is found among low income countries. Globalization, urban population and renewable energy have positive effect on environment degradation while innovation index has negative effect on greenhouse gases emission. The inverted U shaped relationship is found between environment and globalization which means that globalization decrease environment degradation after reaching at specific level. Application/Improvements: To improve the environment, globalization should be increased continuously because after reaching at certain level, it will decrease the environmental degradation. Keywords: Environment Degradation; Globalization; Innovation Index; Kuznet Curve; Urbanization