Debates on how growth and urbanization affect the environment have been intense, but they lack the global perspective. Therefore, this research examined those relationships, and to a greater extent other forms of global environmental degradation, such as foreign direct investment (FDI). It also explored the relationships between industrialization and technologies. The results, using Westerlund cointegration and quantile regressions over the period 1995–2017, show cointegration and regional heterogeneities in the environmental transmissions of economic development, industrialization, renewable energy, urbanization and FDI. The results show that economic development generates more environmental degradation in all quantiles at a global level, whereas urbanization and renewable energy reduce environmental degradation in all quantiles, with the highest effect being in the upper quantiles. On the other hand, industrialization affects the lower quantiles negatively and significantly but affects the upper quantiles positively. Finally, the empirical analysis supports the paradise haven or pollution halo hypothesis (PHH) for the 40th, 50th, 60th and 80th quantiles. This suggests that FDI inflows have a detrimental effect on the host country for these quantiles. Therefore, among the objectives of the policies are to give priority to more sustainable economic growth processes, which contribute to reducing environmental degradation, and furthermore to reinforce strict environmental laws on investment inflows and to build sustainable urbanization and industrialization processes for countries.
In this study we aim to test the effects of foreign direct investment (FDI) on carbon emissions (CO2) in 20 Latin American countries during the period of 1990–2018. Based on the atlas method of the World Bank, we divided the countries into three groups according to their real gross national income per capita: high-income, upper-middle-income and lower-middle-income countries. We used cointegration techniques and causality tests to evaluate the relationship between the variables. To assess the strength of the cointegration vector, we applied the dynamic ordinary least squares (DOLSs) model for individual countries and the dynamic panel ordinary least squares (PDOLSs) model for groups of countries. The results suggest that the entry of FDI into Latin American (LA) countries increases CO2 emissions, affecting the environmental quality. These findings disagree with the environmental Kuznets curve (EKC) hypothesis but, in contrast, they are in line with the pollution haven hypothesis (PHH). Moreover, we show evidence in long-term equilibrium relationship between FDI input and CO2 emissions, which is not the case for the short-term equilibrium. Some additional results suggest that FDI flows do not cause the CO2 emissions in LA countries. The empirical findings suggest policymakers to design policies to “the second-best theory”, targeting FDI flows to their economies to solve economic problems in the short term, but thereafter they may guarantee the reduction in environmental pollution, based on environmentally responsible FDI and stronger regulations. In other words, the transition from a pollution haven to the applicability of the environmental Kuznets curve (EKC). This study contributes with scarce empirical evidence for LA countries in this issue.
14 February 2022 in Business Strategy and the Environment
The tourism sector is growing rapidly, and this has greatly stimulated economic growth around the world; however, the environmental degradation that this implies cannot be ignored. In order to achieve sustainable tourism, it is important to study the link between tourism and environmental quality. Therefore, the objective of this study was to investigate the relationship between tourism and CO2 emissions from 1995 to 2018 in a sample of 20 Latin American countries. Econometric techniques of cointegration and causality were used to evaluate the relationship between these variables. To test the consistency of cointegration vectors, the dynamic ordinary least squares (DOSL) model was applied for individual countries and the panel dynamic ordinary least squares (PDOLS) model for groups of countries. The results show that tourism revenues have a negative effect on the global panel and upper‐middle‐income countries (UMICs). This result is statistically significant. However, as tourism revenues increase, they start to have a positive and significant effect on CO2 emissions per capita, globally and in UMICs. These results, which are contrary to the theory, form a U shape, which does not support the ecological Kuznets curve.
Inequality is a problem that remains latent throughout generations, despite the growth of countries and the mechanisms that were implemented to mitigate it. Understanding the structure of spillovers from a spatial point of view would allow for the management of current resources, with the aim of improving the distribution among individuals at the cantonal level for Ecuador. In this context, this study aims to estimate the effect of the determinants of income inequality at the cantonal level, through the use of spatial models during the period 2010–2019, for 213 cantons in Ecuador. The Kuznets inverted-U theory is applied, which allows us to understand the changes that economic growth produces on income inequality levels. The approach indicates that the current average rate of growth of production per capita has made inequality levels decrease. In addition, human capital has the opposite effect to that expected, increasing inequality levels as a result of a concentration of this resource in certain cantons. On the other hand, the entrepreneurial structure of micro and small enterprises allows to mitigate the inequality levels between cantons. In this sense, among the policy objectives is to prioritize a more homogeneous growth of the cantons of Ecuador, likewise, generate policies that allow reducing the concentration of human capital in certain regions, as well as financial development. On the other hand, it is important to strengthen the prevalence of Micro, small and medium-sized enterprises in the long term, with the aim of improving family income levels and reducing inequality.
Inequality has been of growing interest in the political debate and in theoretical and empirical studies for some decades. Therefore, the study of regional inequality raises some relevant questions related to the spatial nature of the data. In fact, adopting a regional point of view implies the opportunity to consider spatial interactions, which traditional studies do not include in their analyses. Therefore, the study aims to analyze income inequality before () and after () income and transfers, using a data set of 116 countries during a time period from 1985 to 2018. Spatial Durbin and Spatial Lag Models are applied to address spatial interactions and the spillover effect between countries and regions. First, the estimation results verify the existence of spatial correlations in income inequality for both and . Second, both and produce relatively similar scenarios, which implies that the effects of the independent variables do not differ in both scenarios. Third, globalization widens the income differences of neighboring regions significantly. Fourth, urbanization has a negative and significant effect, which generates a spillover effect and reduces the inequality of neighboring economies. Finally, there is evidence that an inverted Kuznets U is rejected both for economic and financial development. Thus, inequality at the regional level provides useful insights for policy makers, as it facilitates the assessment of the effectiveness of strategies aimed at reducing regional disparities and helps to develop actions based on the location and its environment.