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How is environmental performance associated with economic growth? A world cross-country analysis

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  • Neagu Olimpia

    (Faculty of Economics, Engineering and Informatics, Vasile Goldiș Western University of Arad, Romania)

  • Ardelean Doru Ioan

    (Faculty of Economics, Engineering and Informatics, Vasile Goldiș Western University of Arad, Romania)

  • Lazăr Vasile

    (Faculty of Economics, Engineering and Informatics, Vasile Goldiș Western University of Arad, Romania)

Abstract

The aim of the paper is to explore the association between environmental performance and income level in the world economy in 2016. Data from Yale University and World Bank are used in a cross-country regression analysis comprising 166 countries. The gross Domestic Product per capita (based in purchased power parity, constant 2011 international dollars) in these countries is positively associated with the environmental performance index (EPI) calculated by Yale and Columbia University in 2016. Furthermore, the causality of this relationship is from GDP per capita to Environmental Performance and both Environmental Health (EH) and Ecosystem Vitality (EV) are positively associated with GDP per capita. Environmental Health (EH) is stronger related to GDP per capita, meaning that investments in public health, sanitation and infrastructure are increasing as countries develop.

Suggested Citation

  • Neagu Olimpia & Ardelean Doru Ioan & Lazăr Vasile, 2017. "How is environmental performance associated with economic growth? A world cross-country analysis," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 27(3), pages 15-32, September.
    • Handle: RePEc:vrs:suvges:v:27:y:2017:i:3:p:15-32:n:2
    DOI: 10.1515/sues-2017-0010
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    More about this item

    Keywords

    sustainable development; environmental economics; economic growth; cross-sectional models;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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