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The Role of International Trade and Urbanization on Environmental Technical Efficiency in EU Member and Candidate Countries

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  • Yavuz Selman DUMAN

    (Yalova Üniversitesi)

  • Adnan KASMAN

    (Dokuz Eylül Üniversitesi)

Abstract

In recent years, global attention has been devoted towards the devastating effects of high carbon emissions on the environment and economy. The Paris Agreement which was accepted by over 190 countries in December 2015 marks the beginning of a new era towards the battle against climate change. The reason for such a collective action towards a renown global phenomenon is to provide a cleaner environment and sustainable economy for the future generations. Understanding environmental efficiency is one of the most significant aspects of this endeavor. This paper uses environmental efficiency scores estimated through a parametric hyperbolic distance function for EU member and candidate countries over the years 1990-2011, and investigates its relationship with per capita income, industrial share of GDP, openness to trade, and urbanization by using a Tobit model. The results suggest that all the variables are significant determinants of environmental technical efficiency. The relation between environmental technical efficiency and economic development shows a U-shaped curve, whereas industrial share of GDP follows an inverse U-shaped curve. There is an inverse relationship between environmental technical efficiency and openness to trade, and a positive relationship with urbanization.

Suggested Citation

  • Yavuz Selman DUMAN & Adnan KASMAN, 2017. "The Role of International Trade and Urbanization on Environmental Technical Efficiency in EU Member and Candidate Countries," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 17(4), pages 481-491.
    • Handle: RePEc:ege:journl:v:17:y:2017:i:4:p:481-491
    DOI: 10.21121/eab.2017431297
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