Kabiru Hannafi Ibrahim (2021) Impact Of International Trade On Environmental Quality: New Evidence From African Countries. Disertasi thesis, UNIVERSITAS AIRLANGGA.

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Abstract

In an attempt to mitigate global carbon emissions studies have considered trade as one of the determinants of CO2 emissions. These studies had commonly focused on the goods and overall trade without regard to services trade. To this end, within the standard environmental Kuznets curve (EKC) hypothesis this study deviates from previous studies and examined the differential scale, technique, composition, and pollution haven effects of goods and services trade on environmental quality in 47 African countries. The empirical models in this study were estimated using static random coefficient and dynamic generalized method of moment (GMM). Empirical findings validate the differential scale effects of goods and services trade as GDP was found to increase CO2 emissions and degrade the environment. The technique effect reduces CO2 emissions and improves environmental quality. The observed positive scale and the negative technique effects confirmed the existence of the EKC hypothesis in both estimates. Furthermore, in a model incorporating services trade, the study revealed an N-shaped nexus between GDP and CO2 emissions indicating that the negative technique effect of services is only temporary. Findings also revealed that goods and services trade increases CO2 emissions and degrades the environment and that goods trade is more polluting than services trade as the theory might posit. The results further show evidence of non-linear inverted U-shaped nexus between goods trade and carbon emissions and a linear monotonic increasing nexus between services trade and CO2 emissions. The study also confirmed the composition effect which was more robustly observed in the case services. Energy use significantly increases emissions and there is no evidence that trade has promoted the use of energy-efficient technology that reduces emissions. The study also confirmed the pollution haven hypothesis because developed countries transfer their pollution through trade to the continent. Moreover, the results also validate the factor abundance effect that reduces emissions which is more robustly observed in the case of goods trade.

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