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Investigating the Linkage between Economic Growth and Environmental Sustainability in India: Do Agriculture and Trade Openness Matter?

Author

Listed:
  • Ayhan Orhan

    (Economics Department, Faculty of Economic and Administrative Science, Kocaeli University, Kocaeli 41380, Turkey)

  • Tomiwa Sunday Adebayo

    (Department of Business Administration, Faculty of Economics and Administrative Science, Cyprus International University, Nicosia 99258, Turkey)

  • Sema Yılmaz Genç

    (Department of Marketing and Advertising, Ali RızaVeziroğlu Vocational School, Kocaeli University, Kocaeli 41780, Turkey)

  • Dervis Kirikkaleli

    (Department of Banking and Finance, Faculty of Economics and Administrative Sciences, European University of Lefke, Lefke 99010, Turkey)

Abstract

This paper assesses the linkage between CO 2 emissions and economic growth while taking into account the role of energy consumption, agriculture, and trade openness in India. Using data covering the period between 1965 and 2019, the Bayer and Hanck cointegration and Gradual shift causality tests are applied to assess these economic indicators relationships’. Furthermore, we employed the wavelet coherence test. The advantage of the wavelet coherence test is that it differentiates between short-, medium-, and long-run dynamics over the entire sampling period. To the best of the authors’ understanding, the present paper is the first to apply wavelet analysis to investigate this relationship by incorporating agriculture as a determinant of environmental degradation. The empirical outcomes show that all variables appear to be highly correlated with CO 2 emissions with the exemption of trade openness. This is further affirmed by the Gradual shift causality test, which shows that agriculture and energy consumption are crucial determinants of CO 2 emissions in India. Accordingly, adequate policy measures are proposed based on these findings.

Suggested Citation

  • Ayhan Orhan & Tomiwa Sunday Adebayo & Sema Yılmaz Genç & Dervis Kirikkaleli, 2021. "Investigating the Linkage between Economic Growth and Environmental Sustainability in India: Do Agriculture and Trade Openness Matter?," Sustainability, MDPI, vol. 13(9), pages 1-20, April.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:9:p:4753-:d:542095
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