The influence of trade openness on environmental pollution in EU-18 countries
The influence of trade openness on environmental pollution in EU-18 countries
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Date
2020-06
Authors
Mensah, Claudia Nyarko
Mensah, Isaac Adjei
Tachie, Andrews Kwamena
Appiah-Twum, Florence
Dauda, Lamini
Xingle Long
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Publisher
Environmental Science and Pollution Research
Abstract
Trade openness is one of the main channels of globalization and technological transfers. In environmental economic literature, the
implications of trade openness remain controversial and still could be potential drivers of carbon dioxide emissions. This study
therefore explores the effect of trade openness in developed countries using EU-18 economies. We employed an econometric
approach that accounts for cross-section dependence among study variables. The panel CIPS and CADF unit root show that the
variables are stationary and the long-run relationship was confirmed in Westerlund cointegration tests. The mean group (MG) and
augmented mean group (AMG) results show that trade openness increases CO2-emissions in EU-18. Again, energy consumption
and urbanization escalate emissions. The study confirmed the environmental Kuznets curve. Finally, pollution halo and pollution
haven hypothesis were confirmed at both estimation methods. The Dumetriscu-Hurlin Granger causality test results confirmed
bidirectional causality between trade openness and energy consumption and between trade openness and economic growth. Again,
unidirectional Granger causality is running from trade openness and CO2 emissions. Policy recommendations are further proposed
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Citation
Tachie, A. K., Xingle, L., Dauda, L., Mensah, C. N., Appiah-Twum, F., & Adjei Mensah, I. (2020). The influence of trade openness on environmental pollution in EU-18 countries. Environmental Science and Pollution Research, 27, 35535-35555.