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Exploring the Impact of Trading Green Products on the Environment: Introducing the Green Openness Index

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Listed:
  • Can, Muhlis
  • Ben Jebli, Mehdi
  • Brusselaers, Jan

Abstract

Environmental degradation has constantly increased over the years, and has become one of the main contributors to climate change. For this reason, researchers are increasingly on the lookout for parameters that positively impact environmental quality. Green Products are widely accepted as one of the vital tools to minimize the environmental degradation. This paper introduces a new index which is called the Green Openness Index. The index represents the importance of Green Products in a region by means of a measure of trade in Green Products. This new index revisits the trade-environment nexus in a case study of 31 Economic Co-operation and Development (OECD) countries over the period 2007-2017. The empirical findings provide evidence that Environmental Kuznets Curve hypothesis is valid, by means of Fully modified and Dynamic Ordinary Least Squares regression analysis. As such, the new index also opens up a wide span of opportunities for future research, as the index can be used as explanatory variable in numerous different research questions and fields of research. Additionally, the results demonstrate that the presence of Green Products in trade reduces a country’s ecological footprint. This is essential information for practitioners and policy makers involved in the design of sustainable development policies.

Suggested Citation

  • Can, Muhlis & Ben Jebli, Mehdi & Brusselaers, Jan, 2021. "Exploring the Impact of Trading Green Products on the Environment: Introducing the Green Openness Index," MPRA Paper 106730, University Library of Munich, Germany, revised 21 Mar 2021.
    • Handle: RePEc:pra:mprapa:106730
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    Cited by:

    1. Neagu Olimpia & Neagu Mădălin-Ioan, 2022. "The Environmental Kuznets Curve revisited: economic complexity and ecological footprint in the most complex economies of the world," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(1), pages 78-99, March.
    2. Sun, Tong & Wang, Xuefang, 2023. "Adoption of financial inclusion in a world of depleting natural resources: The importance of information and communication technology in emerging economies," Resources Policy, Elsevier, vol. 85(PB).
    3. Li, Jie & Cheng, Pengfei & Qian, Xingyue, 2023. "Do mineral rents endowment and agricultural raw material imports determine natural resource management in the United States?," Resources Policy, Elsevier, vol. 85(PA).
    4. Naqvi, Bushra & Rizvi, Syed Kumail Abbas & Mirza, Nawazish & Umar, Muhammad, 2023. "Financial market development: A potentiating policy choice for the green transition in G7 economies," International Review of Financial Analysis, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Green Openness Index; Green Products; Environmental Friendly Products; Environmental degradation;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • 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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