The Impact of Economic Integration and Economic Growth on Environmental Degradation in Five Asian Countries
Economic integration has been acclaimed as a way to increase world output grounded on the economies of scale and the exchange of technology, ideas and information. However, it is of great concern that the impact of integration may have on the increase in threats to the environment, natural resources and human health, due to the implicit improvement in economic growth. Two main channels through which integration contributes to the growth of the literature have been identified as foreign direct investment and trade.
This study explores the effects of economic integration and economic growth on environmental degradation in the years 1995 to 2015. This study was conducted using the panel data. We apply panel unit root, co-integration tests, and Pooled mean group model to examine the short and long-run relationships among economic integration, economic growth, and the environment in five Asians countries named Pakistan, India, Sri-Lanka, Bangladesh and Nepal
The results of the Pooled Mean Group Model found that there is a long-term relationship among the projected variables for the whole sample. Long run results of Pooled Mean Group model showed that economic growth and foreign direct investment have substantial and positive effect on environmental degradation while trade openness has negative but significant influence on environmental degradation
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