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Heterogeneous effects of industrialization on the environment: Evidence from panel quantile regression

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  • Opoku, Eric Evans Osei
  • Aluko, Olufemi Adewale

Abstract

With growing industrialization comes environmental concerns. Thus, we are motivated to offer empirical insights into how industrialization affects the environment. Using ecological footprint to proxy environmental degradation, we examine the heterogeneous effects of industrialization on the environment. We utilize data from 37 African countries from 2000 to 2016 and use the quantile regression model for panel data. The results show a noteworthy heterogeneous environmental effect of industrialization. Industrialization is found to increase environmental degradation in the 10–30th quantiles, while in the 40–90th quantiles, industrialization reduces environmental degradation. To curb environmental degradation, manufacturing firms should adopt and utilize more greener technologies in their production processes. Besides, environmental regulations must be enforced to ensure that manufacturing activities contribute to sustainable environment and development.

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  • Opoku, Eric Evans Osei & Aluko, Olufemi Adewale, 2021. "Heterogeneous effects of industrialization on the environment: Evidence from panel quantile regression," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 174-184.
    • Handle: RePEc:eee:streco:v:59:y:2021:i:c:p:174-184
    DOI: 10.1016/j.strueco.2021.08.015
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    More about this item

    Keywords

    Industrialization; Ecological footprint; Environmental degradation; Quantile Regression; Africa;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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