The effect of urbanization, energy consumption, and foreign direct investment on the carbon dioxide emission in the SSEA (South and Southeast Asian) region
TL;DR: In this paper, the authors examined the relationship between urbanization, energy consumption, foreign direct investment (FDI), and carbon dioxide (CO2) emission of 17 countries in the South and Southeast Asian (SSEA) region during the period 1980-2012.
Abstract: This study examines the relationship between urbanization, energy consumption, foreign direct investment (FDI), and carbon dioxide (CO2) emission of 17 countries in the South and Southeast Asian (SSEA) region during the period 1980–2012. In order to find out the intensity of CO2 emission in 17 countries, we classify the total sample countries into three sub-groups, namely high, middle, and low-income countries. These three sub-panels are constructed based on their gross national income per capita of countries. Pedroni cointegration result shows that urbanization; primary energy consumption, FDI, and CO2 emission are cointegrated in all sub-groups of countries, regardless of their levels of national income per capita. Furthermore, while incorporating the fossil fuel energy consumption in place of primary energy consumption in the alternative specification of regression, the result suggests a cointegrating relationship between fossil fuel energy consumption, FDI, urbanization, and CO2 emission in middle-income countries. Nevertheless, Westerlund cointegration results are more or less in the line of Pedroni results. Furthermore, the results reveal that primary energy consumption, fossil fuel energy consumption, and FDI are substantially affecting the CO2 emission in the SSEA region. Moreover, the empirical findings suggest that in middle-income countries, both primary and fossil fuel energy consumption are considerably increasing the CO2 emission, and leading to greenhouse gas problem in the SSEA region.
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TL;DR: The study found a strong positive effect of energy consumption on greenhouse gas emissions and confirmed the validity of the pollution haven hypothesis.
692 citations
TL;DR: In this paper, the authors examined the empirical effects of economic growth, electricity consumption, foreign direct investment (FDI), and financial development on carbon dioxide (CO2) emissions in Kuwait using time series data for the period 1980-2013.
Abstract: This study examined the empirical effects of economic growth, electricity consumption, foreign direct investment (FDI), and financial development on carbon dioxide (CO2) emissions in Kuwait using time series data for the period 1980–2013. To achieve this goal, we applied the autoregressive distributed lag (ARDL) bounds testing approach and found that cointegration exists among the series. Findings indicate that economic growth, electricity consumption, and FDI stimulate CO2 emissions in both the short and long run. The VECM Granger causality analysis revealed that FDI, economic growth, and electricity consumption strongly Granger-cause CO2 emissions. Based on these findings, the study recommends that Kuwait reduce emissions by expanding its existing Carbon Capture, Utilization, and Storage plants; capitalizing on its vast solar and wind energy; reducing high subsidies of the residential electricity scheme; and aggressively investing in energy research to build expertise for achieving electricity generation efficiency.
486 citations
Cites background from "The effect of urbanization, energy ..."
...Behera and Dash (2017) estimated two models for a panel of 17 South and SouthEast Asian countries (SSEA) for the period 1980-2012....
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...Behera and Dash (2017) estimated two models for a panel of 17 South and South- East Asian countries (SSEA) for the period 1980-2012....
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TL;DR: In this paper, the authors investigated the pollution haven hypothesis (PHH) in Ghana utilizing CO 2 emission as an indicator of air pollution for the period of 1980-2012, using different time series models utilizing the autoregressive distributed lag (ARDL) method.
438 citations
TL;DR: In this article, the authors examined the association between foreign direct investment (FDI) and carbon emissions for the Middle East and North African (MENA) region in 1990-2015, including biomass energy consumption as an additional determinant of carbon emissions.
386 citations
TL;DR: In this article, the authors explore the link between urbanization, economic development, energy consumption, and CO2 emissions, specifically taking into account the different income levels of the countries studied.
Abstract: The growth of anthropogenic CO2 emissions has been widely attributed to the combustion of energy in support of human activities associated with economic development. While the link between urbanization, economic growth, energy consumption, and CO2 emissions has, as a result, received considerable multidisciplinary scholarly attention, little work has been undertaken with respect to the how differences in the development stages or income levels of the countries studied may affect these relations. Here, we empirically explore the link between urbanization, economic development, energy consumption, and CO2 emissions, specifically taking into account the different income levels of the countries studied. A series of panel data models and a balanced dataset for a panel of 170 countries were utilized in the study, which took the period of 1980–2011 into consideration. The result of panel cointegration tests suggested that a cointegration relationship existed between variables in all the countries studied, and that a statistically significant positive relationship existed between the variables employed in the long run. The results of a Granger causality test based on the Vector Error-Correction Model (VECM) provided evidence of varied Granger causality relationships between the variables across the income-based subpanels. Moreover, we also undertook an impulse response and variance decomposition analysis that allowed us to forecast the impacts of economic growth, urbanization, and energy consumption on future CO2 emissions during the period surveyed. Our results cast a new light on the importance of a country's development stage and income level for government policy decisions relating to the reduction of CO2 emissions.
367 citations
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TL;DR: The Im-Pesaran-Shin (IPS) test as discussed by the authors relaxes the restrictive assumption of the LL test and is best viewed as a test for summarizing the evidence from independent tests of the sample hypothesis.
Abstract: The panel data unit root test suggested by Levin and Lin (LL) has been widely used in several applications, notably in papers on tests of the purchasing power parity hypothesis. This test is based on a very restrictive hypothesis which is rarely ever of interest in practice. The Im–Pesaran–Shin (IPS) test relaxes the restrictive assumption of the LL test. This paper argues that although the IPS test has been offered as a generalization of the LL test, it is best viewed as a test for summarizing the evidence from a number of independent tests of the sample hypothesis. This problem has a long statistical history going back to R. A. Fisher. This paper suggests the Fisher test as a panel data unit root test, compares it with the LL and IPS tests, and the Bonferroni bounds test which is valid for correlated tests. Overall, the evidence points to the Fisher test with bootstrap-based critical values as the preferred choice. We also suggest the use of the Fisher test for testing stationarity as the null and also in testing for cointegration in panel data.
6,652 citations
TL;DR: In this paper, a simple alternative test where the standard unit root regressions are augmented with the cross section averages of lagged levels and first-differences of the individual series is also considered.
Abstract: A number of panel unit root tests that allow for cross section dependence have been proposed in the literature, notably by Bai and Ng (2002), Moon and Perron (2003), and Phillips and Sul (2002) who use orthogonalization type procedures to asymptotically eliminate the cross dependence of the series before standard panel unit root tests are applied to the transformed series. In this paper we propose a simple alternative test where the standard DF (or ADF) regressions are augmented with the cross section averages of lagged levels and first-differences of the individual series. A truncated version of the CADF statistics is also considered. New asymptotic results are obtained both for the individual CADF statistics, and their simple averages. It is shown that the CADF_i statistics are asymptotically similar and do not depend on the factor loadings under joint asymptotics where N (cross section dimension) and T (time series dimension) tends to infinity, such that N/T tends to k, where k is a fixed finite non-zero constant. But they are asymptotically correlated due to their dependence on the common factor. Despite this it is shown that the limit distribution of the average CADF statistic exists and its critical values are tabulated. The small sample properties of the proposed tests are investigated by Monte Carlo experiments, for a variety of models. It is shown that the cross sectionally augmented panel unit root tests have satisfactory size and power even for relatively small values of N and T. This is particularly true of cross sectionally augmented and truncated versions of the simple average t-test of Im, Pesaran and Shin, and Choi's inverse normal combination test.
6,169 citations
TL;DR: In this paper, a simple alternative where the standard ADF regressions are augmented with the cross section averages of lagged levels and first-differences of the individual series is proposed, and it is shown that the individual CADF statistics are asymptotically similar and do not depend on the factor loadings.
Abstract: A number of panel unit root tests that allow for cross section dependence have been proposed in the literature that use orthogonalization type procedures to asymptotically eliminate the cross dependence of the series before standard panel unit root tests are applied to the transformed series. In this paper we propose a simple alternative where the standard ADF regressions are augmented with the cross section averages of lagged levels and first-differences of the individual series. New asymptotic results are obtained both for the individual CADF statistics, and their simple averages. It is shown that the individual CADF statistics are asymptotically similar and do not depend on the factor loadings. The limit distribution of the average CADF statistic is shown to exist and its critical values are tabulated. Small sample properties of the proposed test are investigated by Monte Carlo experiments. The proposed test is applied to a panel of 17 OECD real exchange rate series as well as to log real earnings of households in the PSID data.
6,022 citations
TL;DR: Urban ecology integrates natural and social sciences to study these radically altered local environments and their regional and global effects of an increasingly urbanized world.
Abstract: Urban areas are hot spots that drive environmental change at multiple scales. Material demands of production and human consumption alter land use and cover, biodiversity, and hydrosystems locally to regionally, and urban waste discharge affects local to global biogeochemical cycles and climate. For urbanites, however, global environmental changes are swamped by dramatic changes in the local environment. Urban ecology integrates natural and social sciences to study these radically altered local environments and their regional and global effects. Cities themselves present both the problems and solutions to sustainability challenges of an increasingly urbanized world.
5,096 citations
TL;DR: This paper examined properties of residual-based tests for the null of no cointegration for dynamic panels in which both the short-run dynamics and the long-run slope coefficients are permitted to be heterogeneous across individual members of the panel.
Abstract: We examine properties of residual-based tests for the null of no cointegration for dynamic panels in which both the short-run dynamics and the long-run slope coefficients are permitted to be heterogeneous across individual members of the panel. The tests also allow for individual heterogeneous fixed effects and trend terms, and we consider both pooled within dimension tests and group mean between dimension tests. We derive limiting distributions for these and show that they are normal and free of nuisance parameters. We also provide Monte Carlo evidence to demonstrate their small sample size and power performance, and we illustrate their use in testing purchasing power parity for the post–Bretton Woods period.I thank Rich Clarida, Bob Cumby, Mahmoud El-Gamal, Heejoon Kang, Chiwha Kao, Andy Levin, Klaus Neusser, Masao Ogaki, David Papell, Pierre Perron, Abdel Senhadji, Jean-Pierre Urbain, Alan Taylor, and three anonymous referees for helpful comments on various earlier versions of this paper. The paper has also benefited from presentations at the 1994 North American Econometric Society Summer Meetings in Quebec City, the 1994 European Econometric Society Summer Meetings in Maastricht, and workshop seminars at the Board of Governors of the Federal Reserve, INSEE-CREST Paris, IUPUI, Ohio State, Purdue, Queens University Belfast, Rice University–University of Houston, and Southern Methodist University. Finally, I thank the following students who provided assistance in the earlier stages of the project: Younghan Kim, Rasmus Ruffer, and Lining Wan.
4,189 citations