The effects of corruption, renewable energy, trade and CO2 emissions

Corruption reflects a set of illegal activities that jeopardize the smooth functioning of economies, society, and climate and environmental issues. This article tests the relationships between economic growth, corruption, renewable energies, international trade, and carbon dioxide emissions using pa...

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Bibliographic Details
Published in:Economies 2021-06, Vol.9 (2), p.1-19
Main Author: Leitão, Nuno Carlos
Format: Article
Language:English
Subjects:
Air pollution
Carbon dioxide
Climate change
Corruption
Econometrics
Economic growth
Emissions
Energy consumption
Foreign investment
Hypotheses
innovation
International trade
Literature reviews
Longitudinal studies
Monopolistic competition
Outdoor air quality
panel data
Per capita
Population
R&D
renewable energy
Renewable resources
Research & development
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Summary:Corruption reflects a set of illegal activities that jeopardize the smooth functioning of economies, society, and climate and environmental issues. This article tests the relationships between economic growth, corruption, renewable energies, international trade, and carbon dioxide emissions using panel data for European countries, namely Portugal, Spain, Italy, Ireland, and Greece, from 1995-2015. As an econometric strategy, this research uses the panel fully modified least squares (FMOLS), panel dynamic least squares (DOLS), and panel two-stage least squares estimator (TSLS). Considering the variables utilized in the research and the panel unit root test, we observed that the variables are integrated I (1) in the first difference. The variables of corruption, economic growth, renewable energies, international trade, and carbon dioxide emissions are cointegrated in the long run, using the Pedroni and Kao residual cointegration test arguments. The methodology of Dumitrescu-Hurlin to test the causality between carbon dioxide emissions, corruption, economic growth, and renewable energy shows that there is unidirectional causality between carbon dioxide emissions and corruption and economic growth and corruption. The results suggest that the corruption index and economic growth have a statistically significant positive impact on carbon dioxide emissions. However, renewable energies and international trade reduce climate change and improve the environmental quality.
ISSN:2227-7099
2227-7099
DOI:10.3390/economies9020062