REVISITING THE RELATIONSHIP BETWEEN CARBON EMISSIONS, MEDIUM AND HIGH-TECH INDUSTRIES AND ECONOMIC GROWTH: U-SHAPED EVIDENCE FROM DEVELOPING EUROPEAN COUNTRIES

Abstract

Environmental pollution is one of the biggest problems faced by the developing countries while sustaining their growth rates. The relationship between economic growth and environmental pollution is dealt with within the context of Environmental Kuznets Curve in literature. Most of the studies conducted within the context of Environmental Kuznets Curve have established that there is an inverted U-shaped relationship between economic growth and CO2 emissions. This study has been designed to analyse the relationship between the income per capita and CO2 emissions in 8 developing European countries between 2001 and 2018. Unlike the previous studies, in this study the effect of the added value of the medium and high-tech products on CO2 emissions has been analysed and the analysed time period has been made to represent the more updated state of CO2 emissions. In this study conducted by using the panel data analysis method, unlike in most of the studies in literature, it has been found out that Environmental Kuznets Curve is U-shaped. Besides, the added value of the medium and high-tech products has a statistically significant effect on CO2 emissions, and the increase in the added value of the medium and high-tech products reduces CO2 emissions.