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Spillover effects of trade openness on CO 2 emissions in middle‐income countries: A spatial panel data approach
Author(s) -
Ragoubi Hanen,
Mighri Zouheir
Publication year - 2021
Publication title -
regional science policy and practice
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.342
H-Index - 8
ISSN - 1757-7802
DOI - 10.1111/rsp3.12360
Subject(s) - openness to experience , panel data , spillover effect , economics , per capita income , spatial dependence , greenhouse gas , sample (material) , per capita , urbanization , demographic economics , international economics , econometrics , macroeconomics , economic growth , population , demography , statistics , psychology , social psychology , ecology , chemistry , mathematics , chromatography , sociology , biology
Abstract This paper empirically investigates the spatial effects of trade openness on CO 2 emissions in a panel of 54 middle‐income countries over the period 1996–2013. It adopts a static spatial panel data approach as well as a dynamic spatial panel data model with common factors to address the problems of spatial dependency and spillover effects and to explain the non‐stationary diffusion process of CO 2 emissions across middle‐income countries. The empirical results indicate that: (i) there is a spatial dependence in CO 2 emissions across the sample of middle‐income countries; (ii) Both global common factors and local spatial dependence are important drivers of the propagation patterns of CO 2 emissions over the selected time‐period; (iii) trade openness, per capita real income, urbanization and energy intensity are the main determinants of CO 2 emissions; (iv) the direct effect of trade openness on CO 2 emissions is significantly positive; and (v) the indirect effect of trade openness on CO 2 emissions is so significantly negative to overcome the positive direct effect, which implies a negative and significant total effect. This study provides robust policy implications for the sample of middle‐income countries to help them improve environmental quality.