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Are too many natural resources to blame for the shape of the Environmental Kuznets Curve in resource-based economies?

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  • Badeeb, Ramez Abubakr
  • Lean, Hooi Hooi
  • Shahbaz, Muhammad

Abstract

This paper proposes the role of natural resource dependence (NRD) in the conventional Environmental Kuznets Curve (EKC) hypothesis in resource-based countries. We set up three hypotheses to challenge the conventional EKC hypothesis. Empirically, we find that NRD strengthens the relationship between economic growth and CO2 emissions while weakens the relationship between the quadratic of economic growth and CO2 emissions. This infers that the EKC pattern in resource-based countries does not follow the conventional EKC pattern due to natural resource curse mechanism. Our results imply that the EKC mechanism per se does not explain the growth–environment nexus in resource-based countries. The explanation is rather found in a mix of both EKC and natural resource curse hypotheses.

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  • Badeeb, Ramez Abubakr & Lean, Hooi Hooi & Shahbaz, Muhammad, 2020. "Are too many natural resources to blame for the shape of the Environmental Kuznets Curve in resource-based economies?," Resources Policy, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:jrpoli:v:68:y:2020:i:c:s0301420719309213
    DOI: 10.1016/j.resourpol.2020.101694
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    Keywords

    Environmental kuznets curve; Natural resource curse; CO2 emission;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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