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Revisiting environmental Kuznets curve: The effects of foreign aid on air quality in Africa

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  • Xu, Zhicheng
  • Zhang, Yu

Abstract

The Environmental Kuznets Curve hypothesis suggests that an inverted U relationship exists between economic development and environmental pollution. However, this study shows that Chinese aid, particularly in the form of economic infrastructure in Africa, improved the local air quality and economic development simultaneously, even though Africa is still at the early stage of urbanization and industrialization. A battery of robustness checks, including instrumental variable estimation and permutation test with randomly assigned aid projects, further supports our findings. Therefore, aids in advanced economic infrastructure that improve resource consumption efficiency can mitigate the dilemma between growth and environment for emerging economies. (JEL: F35, O18, O55, Q53).

Suggested Citation

  • Xu, Zhicheng & Zhang, Yu, 2023. "Revisiting environmental Kuznets curve: The effects of foreign aid on air quality in Africa," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 1464-1474.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:1464-1474
    DOI: 10.1016/j.iref.2023.07.081
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    Keywords

    Aid; Infrastructure; EKC dilemma; Economic development; Air pollution;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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