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Environmental Performance and GDP Growth: A Non-linear Approach for the G20 Countries

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  • Koukouritakis, Minoas

    (Department of Economics, University of Crete, Rethymno, Greece)

Abstract

This paper investigates the relationship between the environmental performance (measured by the Environmental Performance Index 2020) and the economic performance (measured by the real GDP growth rate) for the G20 countries plus Spain and two smaller sub-groups: the advanced G7 economies plus Spain and the emerging BRICS economies. Using annual data for the period 1995-2019, a Panel Smooth Transition Regression model is estimated. The empirical results indicate that for the group of the G20 countries plus Spain, the impact of environmental performance on the real GDP growth rate is negative below a specific turning point, while it becomes positive above this point. Similar results are obtained for the group of the G7 countries plus Spain, while for the BRIICS economies this impact is negative only in the low regime. Thus, it seems that the emerging economies probably follow a different path, mainly due to their high-polluting production structure. Performance ambientale e crescita del PIL: un approccio non-lineare per i paesi G20 Questo articolo studia la relazione tra la performance ambientale (misurata dall’Indice di sostenibilità ambientale 2020) e la performance economica (misurata dal tasso di crescita del PIL reale) nei paesi G20 e la Spagna e due piccoli sottogruppi: le economie avanzate del G7 più la Spagna e le economie emergenti dei paesi BRICS. Si utilizzano dati annuali relativi al periodo 1995-2019 e un modello di Panel Smooth Transition Regression. I risultati empirici indicano che per il gruppo G20 più Spagna l’impatto della performance ambientale sul tasso di crescita del PIL reale è negativo al di sotto di uno specifico punto di svolta, mentre diventa positivo al di sopra di questo punto. Risultati simili si ottengono per il gruppo G7 più Spagna, mentre per i BRICS l’impatto è negativo solo nel basso regime. Sembrerebbe cioè che le economie emergenti seguano un andamento diverso a causa della loro struttura produttiva altamente inquinante.

Suggested Citation

  • Koukouritakis, Minoas, 2022. "Environmental Performance and GDP Growth: A Non-linear Approach for the G20 Countries," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 75(1), pages 101-130.
    • Handle: RePEc:ris:ecoint:0915
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    More about this item

    Keywords

    G20; Real GDP Growth Rate; Environmental Performance Index 2020; Neoclassical Environmental Economics; Porters Hypothesis; Panel Smooth Transition Regression Model;
    All these keywords.

    JEL classification:

    • F64 - International Economics - - Economic Impacts of Globalization - - - Environment
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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