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Trade Openness, Political Stability and Environmental Performance: What Kind of Long-Run Relationship?
- Source :
-
Problems of Sustainable Development / Problemy Ekorozwoju . 2018, Vol. 13 Issue 2, p57-66. 10p. - Publication Year :
- 2018
-
Abstract
- This paper investigates the long-run relationships among environmental performance, political stability, and trade openness for 126 countries as well as the sub-samples of OECD and non-OECD countries, using the panel cointegration and panel-based error correction models for the period 2002-2014. For the full sample and the non-OECD countries, our results corroborate that there exists a long-term equilibrium cointegrated relationship among the variables. Moreover, the panel fully modified ordinary least square (FMOLS) estimations present that political stability and trade openness have a negative effect on environmental performance in full samples case as well as the non-OECD countries, whereas trade openness exhibits a positive influence on environmental performance in OECD countries. The vector error correction model (VECM) shows a diversified negative causalities running from trade openness and political stability to environmental performance in the long run for both full samples and the sub-samples countries. The policy implication is that pollution haven hypothesis (PHH) is supported and trade regulations can help promote environmental performance; meanwhile, political stability accelerates macroeconomic performance and attracts more foreign investment. Overall, the government can carry on a policy to lower pollution levels, thus further advancing environmental performance. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 18956912
- Volume :
- 13
- Issue :
- 2
- Database :
- Academic Search Index
- Journal :
- Problems of Sustainable Development / Problemy Ekorozwoju
- Publication Type :
- Academic Journal
- Accession number :
- 130008724