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The Relationship among Trade, Income and Environment in Iran

Author

Listed:
  • Mohsen Mehrara
  • Abbas Rezazadeh Karsalari
  • Maysam Musai
  • Reza Shafizadeh

Abstract

This paper examines causal relationships between environment, GDP and trade for Iran using annual data over the period 1970-201, applying the techniques of the long–run Granger non–causality test proposed by Toda and Yamamoto (1995). The results suggest that there is a long-run relationship between these variables. CO2 emissions have a positive long-run relationship with per capita income, indicating economic growth tends to worsen environmental quality. In addition, CO2 emissions have a positive long-run relationship with openness, supporting for the so-called race-to-the bottom hypothesis for developing countries. The Granger Causality test indicates strong unidirectional effects from GDP to CO2 emissions.

Suggested Citation

  • Mohsen Mehrara & Abbas Rezazadeh Karsalari & Maysam Musai & Reza Shafizadeh, 2014. "The Relationship among Trade, Income and Environment in Iran," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(12), pages 316-323, December.
    • Handle: RePEc:hur:ijarbs:v:4:y:2014:i:12:p:316-323
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