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Panel analysis of CO2 emissions, GDP, energy consumption, trade openness and urbanization for MENA countries


  • Farhani, Sahbi
  • Shahbaz, Muhammad
  • AROURI, Mohamed El Hedi


This paper empirically parallels two approaches: The first one follows the studies of Halicioglu (2009), Jalil and Mahmud (2009), and Jayanthakumaran et al. (2012) which attempt to introduce energy consumption and trade into the environmental function (related carbon dioxide ‘CO2’ emissions to Gross Domestic Product ‘GDP’); whereas the second approach extends the single work of Hossain (2011) which attempts to introduce urbanization as a means to circumvent omitted variable bias. For 11 Middle East and North African (MENA) countries over the period 1980-2009, the empirical results appear to be relevant in light of the Environmental Kuznets Curve (EKC) literature based on the cointegrated and causal relationship. Policy implications indicate that: i) more energy use, higher GDP and greater trade openness tend to cause more CO2 emissions; ii) the inclusion of urbanization in the environmental function improves the final results and positively affects the pollution level; and iii) MENA countries should search the best policy which can stabilize the rise of growth GDP and trade openness, and which can also control the continuous increase in the use of energy.

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  • Farhani, Sahbi & Shahbaz, Muhammad & AROURI, Mohamed El Hedi, 2013. "Panel analysis of CO2 emissions, GDP, energy consumption, trade openness and urbanization for MENA countries," MPRA Paper 49258, University Library of Munich, Germany, revised 20 Aug 2013.
  • Handle: RePEc:pra:mprapa:49258

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    References listed on IDEAS

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    8. Balcılar, Mehmet & Demirer, Rıza & Hammoudeh, Shawkat & Nguyen, Duc Khuong, 2016. "Risk spillovers across the energy and carbon markets and hedging strategies for carbon risk," Energy Economics, Elsevier, vol. 54(C), pages 159-172.
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    10. Farhani, Sahbi & Chaibi, Anissa & Rault, Christophe, 2014. "CO2 emissions, output, energy consumption, and trade in Tunisia," Economic Modelling, Elsevier, vol. 38(C), pages 426-434.
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    More about this item


    Environmental Kuznets Curve (EKC) literature; Panel data analysis; Middle East and North African (MENA) countries;

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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