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Minoas Koukouritakis, Department of Economics, University of Crete, Rethymno, Greece

Environmental Performance and GDP Growth: A Non-linear Approach for the G20 Countries

Volume 75 - Issue 1, February 2022
(pp. 101-130)
JEL classification: F64, O44, Q56
Keywords: G20, Real GDP Growth Rate, Environmental Performance Index 2020, Neoclassical Environmental Economics, Porter's Hypothesis, Panel Smooth Transition Regression Model


This paper investigates the relationship between the environmental performance (measured by the Environmental Performance Index 2020) and the economic performance (measured by the real GDP growth rate) for the G20 countries plus Spain and two smaller sub-groups: the advanced G7 economies plus Spain and the emerging BRICS economies. Using annual data for the period 1995-2019, a Panel Smooth Transition Regression model is estimated. The empirical results indicate that for the group of the G20 countries plus Spain, the impact of environmental performance on the real GDP growth rate is negative below a specific turning point, while it becomes positive above this point. Similar results are obtained for the group of the G7 countries plus Spain, while for the BRIICS economies this impact is negative only in the low regime. Thus, it seems that the emerging economies probably follow a different path, mainly due to their high-polluting production structure.

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Institute for International Economics
of the Genoa Chamber of Commerce

Istituto di Economia Internazionale
Camera di Commercio di Genova
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