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The EKC for SO2: does firm size matter?

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Author Info
B. MERLEVEDE ()
T. VERBEKE ()
M. DE CLERCQ ()

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Abstract

The environmental Kuznets curve hypothesis (EKC) predicts and inverse U-shaped relationship between environmental pollution and per capita income. The literature with respect to the EKC is vast but far from conclusive. This paper adds firm size to the standard EKC reduced form regression and analyses whether firm size matters once income and composition are controlled for. Results suggest that countries whose average firm is larger are initially associated with higher levels of environmental damage. However, as economies develop, large firm countries find it easier to adopt environmental legislation. Environmental damage starts to decrease at lower levels of income and the decrease is much larger compared to countries whose firms are on average small.

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Publisher Info
Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 04/218.

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Length: 30 pages
Date of creation: Jan 2004
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Handle: RePEc:rug:rugwps:04/218

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Related research
Keywords: Environmental Kuznets Hypothesis; Firm size;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-73, Supplemen. [Downloadable!] (restricted)
  2. Munasinghe, Mohan, 1999. "Is environmental degradation an inevitable consequence of economic growth: tunneling through the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 29(1), pages 89-109, April. [Downloadable!] (restricted)
  3. Cole, M.A., 1999. "Air Pollution and 'Dirty' Industries: How and Why Does the Composition of Manufacturing Output Change with Economic Development?," Discussion Papers 99-07, Department of Economics, University of Birmingham.
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  4. Douglas Holtz-Eakin & Thomas M. Selden, 1992. "Stoking the Fires? Co2 Emissions and Economic Growth," NBER Working Papers 4248, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September. [Downloadable!] (restricted)
  6. Kaufmann, Robert K. & Davidsdottir, Brynhildur & Garnham, Sophie & Pauly, Peter, 1998. "The determinants of atmospheric SO2 concentrations: reconsidering the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 209-220, May. [Downloadable!] (restricted)
  7. William T. Harbaugh & Arik Levinson & David Molloy Wilson, 2002. "Reexamining The Empirical Evidence For An Environmental Kuznets Curve," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 541-551, August. [Downloadable!] (restricted)
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  8. Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C. S. & Jansson, Bengt-Owe & Levin, Simon & Maler, Karl-Goran & Perrings, Charles & Pimentel, David, 1995. "Economic growth, carrying capacity, and the environment," Ecological Economics, Elsevier, vol. 15(2), pages 91-95, November. [Downloadable!] (restricted)
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  9. David I. Stern & Tony Auld & Michael S. Common & Kali K. Sanyal, 1998. "Is there an environmental Kuznets curve for sulfur?," Working Papers in Ecological Economics 9804, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
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  10. Andreoni, James & Levinson, Arik, 2001. "The simple analytics of the environmental Kuznets curve," Journal of Public Economics, Elsevier, vol. 80(2), pages 269-286, May. [Downloadable!] (restricted)
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  11. Stern , David I., 1998. "Progress on the environmental Kuznets curve?," Environment and Development Economics, Cambridge University Press, vol. 3(02), pages 173-196, May. [Downloadable!]
  12. Costanza, Robert, 1995. "Economic growth, carrying capacity, and the environment," Ecological Economics, Elsevier, vol. 15(2), pages 89-90, November. [Downloadable!] (restricted)
  13. Roger Perman & David I. Stern, 2003. "Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society and Blackwell Publishing Asia Pty Ltd., vol. 47(3), pages 325-347, 09. [Downloadable!] (restricted)
  14. Gale, Lewis R. & Mendez, Jose A., 1998. "The empirical relationship between trade, growth and the environment," International Review of Economics & Finance, Elsevier, vol. 7(1), pages 53-61. [Downloadable!] (restricted)
  15. Scruggs, Lyle A., 1998. "Political and economic inequality and the environment," Ecological Economics, Elsevier, vol. 26(3), pages 259-275, September. [Downloadable!] (restricted)
  16. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. David I. Stern, 2004. "Diffusion of Emissions Abating Technology," Rensselaer Working Papers in Economics 0420, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
  2. Sedigh, Golnaz, 2008. "Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries," MPRA Paper 10003, University Library of Munich, Germany. [Downloadable!]
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