Testing Environmental Kuznets Curve hypothesis in Asian countries

Abstract

The aim of this study is to test the Environmental Kuznet Curve (EKC) hypothesis for 14 Asian countries spanning the period 1990–2011. We focused on how both income and policies in these countries affect the income–emissions (environment) relationship. The GMM methodology using panel data is employed in a multivariate framework to test the EKC hypothesis. The multivariate framework includes: CO2 emissions, GDP per capita, population density, land, industry shares in GDP, and four indicators that measure the quality of institutions. In terms of the presence of an inverted U-shape association between emissions and income per capita, the estimates have the expected signs and are statistically significant, yielding empirical support to the presence of an Environmental Kuznets Curve hypothesis.