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The EKC for SO2: does firm size matter?

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  • B. MERLEVEDE

    ()

  • T. VERBEKE

    ()

  • M. DE CLERCQ

    ()

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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Bibliographic 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
Date of revision:
Handle: RePEc:rug:rugwps:04/218

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Keywords: Environmental Kuznets Hypothesis; Firm size;

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References

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  1. William Harbaugh & Arik Levinson & David Wilson, 2000. "Reexamining the Empirical Evidence for an Environmental Kuznets Curve," NBER Working Papers 7711, National Bureau of Economic Research, Inc.
  2. Scruggs, Lyle A., 1998. "Political and economic inequality and the environment," Ecological Economics, Elsevier, vol. 26(3), pages 259-275, September.
  3. Suri, Vivek & Chapman, Duane, 1998. "Economic growth, trade and energy: implications for the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 25(2), pages 195-208, May.
  4. 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.
  5. Perman, Roger & Stern, David I., 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, vol. 47(3), September.
  6. 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.
  7. 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.
  8. James Andreoni & Arik Levinson, 1998. "The Simple Analytics of the Environmental Kuznets Curve," NBER Working Papers 6739, National Bureau of Economic Research, Inc.
  9. 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.
  10. 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.
  11. 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.
  12. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-73, Supplemen.
  13. Matthew Cole, 2000. "Air Pollution and ‘Dirty’ Industries: How and Why Does the Composition of Manufacturing Output Change with Economic Development?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(1), pages 109-123, September.
  14. 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.
  15. 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.
  16. Stern , David I., 1998. "Progress on the environmental Kuznets curve?," Environment and Development Economics, Cambridge University Press, vol. 3(02), pages 173-196, May.
  17. Costanza, Robert, 1995. "Economic growth, carrying capacity, and the environment," Ecological Economics, Elsevier, vol. 15(2), pages 89-90, November.
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Citations

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Cited by:
  1. Gallaway, Terrel & Olsen, Reed N. & Mitchell, David M., 2010. "The economics of global light pollution," Ecological Economics, Elsevier, vol. 69(3), pages 658-665, January.
  2. Caviglia-Harris, Jill L. & Chambers, Dustin & Kahn, James R., 2009. "Taking the "U" out of Kuznets: A comprehensive analysis of the EKC and environmental degradation," Ecological Economics, Elsevier, vol. 68(4), pages 1149-1159, February.
  3. Liu, Yong, 2014. "Barriers to the adoption of low carbon production: A multiple-case study of Chinese industrial firms," Energy Policy, Elsevier, vol. 67(C), pages 412-421.
  4. Justin Tevie & Kristine M. Grimsrud & Robert P. Berrens, 2011. "Testing the Environmental Kuznets Curve Hypothesis for Biodiversity Risk in the US: A Spatial Econometric Approach," Sustainability, MDPI, Open Access Journal, vol. 3(11), pages 2182-2199, November.
  5. David I. Stern, 2004. "Diffusion of Emissions Abating Technology," Rensselaer Working Papers in Economics 0420, Rensselaer Polytechnic Institute, Department of Economics.
  6. Brajer, Victor & Mead, Robert W. & Xiao, Feng, 2011. "Searching for an Environmental Kuznets Curve in China's air pollution," China Economic Review, Elsevier, vol. 22(3), pages 383-397, September.
  7. Brajer, Victor & Mead, Robert W. & Xiao, Feng, 2008. "Health benefits of tunneling through the Chinese environmental Kuznets curve (EKC)," Ecological Economics, Elsevier, vol. 66(4), pages 674-686, July.
  8. Sedigh, Golnaz, 2008. "Do environmental regulations reduce greenhouse gas emissions? A study on Canadian industries," MPRA Paper 10003, University Library of Munich, Germany.
  9. He, Jie & Wang, Hua, 2012. "Economic structure, development policy and environmental quality: An empirical analysis of environmental Kuznets curves with Chinese municipal data," Ecological Economics, Elsevier, vol. 76(C), pages 49-59.
  10. Jalal Dehnavi & Amin Haghnejad, 2012. "Energy Consumption, Economic Growth, And Pollution In Selected Opec Countries: Testing The Environmental Kuznets Curve Hypothesis," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 4(2 (July)), pages 149-166.

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