Are too many natural resources to blame for the shape of the Environmental Kuznets Curve in resource-based economies?

By Ramez Abubakr Badeeb, Hooi Hooi Lean, Muhammad Shahbaz. 2020

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Abstract This paper proposes the role of natural resource dependence (NRD) in the conventional Environmental Kuznets Curve (EKC) hypothesis in resource-based countries. We set up three hypotheses to challenge the conventional EKC hypothesis. Empirically, we find that NRD strengthens the relationship between economic growth and CO2 emissions while weakens the relationship between the quadratic of economic growth and CO2 emissions. This infers that the EKC pattern in resource-based countries does not follow the conventional EKC pattern due to natural resource curse mechanism. Our results imply that the EKC mechanism per se does not explain the growth–environment nexus in resource-based countries. The explanation is rather found in a mix of both EKC and natural resource curse hypotheses.

Subfields: Building and Construction, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/390798328b9f3546e9ef2f271958d08f2307d642