Recent Articles

Read more about our latest published articles.

Review’s Archive

Corresponding Author:
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.

Read the full article

Download the article in PDF format to read and print.


Barra, C. and R. Zotti (2018), “Investigating the Non-linearity between National Income and Environmental Pollution: International Evidence of Kuznets Curve”, Environmental Economics and Policy Studies, 20(1), 179-210.

Ben Cheikh, N. and Y. Ben Zaied (2020), “Revisiting the Pass-through of Exchange Rate in the Transition Economies: New Evidence from New EU Member States”, Journal of International Money and Finance, 100, 102093.

Ben Lahouel, B., M.G. Bruna, and Y. Ben Zaied, (2020), “The Curvilinear Relationship between Environmental Performance and Financial Performance: An Investigation of Listed French Firms using Panel Smooth Transition Model”, Finance Research Letters, 35, 101455

Ben Lahouel, B., B. Gaies, Y. Ben Zaied and A. Jahmane (2019), “Accounting for Endogeneity and the Dynamics of Corporate Social - Corporate Financial Relationship”, Journal of Cleaner Production, 230, 352-364.

Zwane, T., M. Biyase, M. Maleka and A. Maluleka (2020), “Technical Efficiency and Economic Growth in the SADC Region”, Economia Internazionale/International Economics, 73(2), 307-324.

Chen, C.J., R.S. Guo, Y.C. Hsiao and K.L. Chen (2018), “How Business Strategy in Non-financial Firms Moderates the Curvilinear Effects of Corporate Social Responsibility and Irresponsibility on Corporate Financial Performance”, Journal of Business Research, 92, 154-167.

Colletaz, G. and C. Hurlin (2006), “Threshold Effects of the Public Capital Productivity: An International Panel Smooth Transition Approach”, Université d'Orléans LEO Working Paper halshs-00008056, HAL.

Elsayed, K. and D. Paton (2005), “The Impact of Environmental Performance on Firm Performance: Static and Dynamic Panel Data Evidence”, Structural Change and Economic Dynamics, 16(3), 395-412.

Ferreira, C. (2020), “Globalisation and Economic Growth: A Panel Data Approach”, Economia Internazionale/International Economics, 73(2), 187-236.

Fouquau, J., C. Hurlin and I. Rabaud (2008), “The Feldstein-Horioka Puzzle: A Panel Smooth Transition Regression Approach”, Economic Modelling, 25(2), 284-299.

Giannellis, N. and Koukouritakis, M. (2019), “Gold Price and Exchange Rates: A Panel Smooth Transition Regression Model for the G7 Countries”, North American Journal of Economics and Finance, 49(C), 27-46.

González, A., T. Teräsvirta, D. van Dijk and Y. Yang (2017), “Panel Smooth Transition Regression Models”, Department of Economics and Business Economics, Aarhus University CREATES Research Paper 2017-36 (first version 2005).

Halkos, G.E. and Bampatsou, C. (2019), “Economic Growth and Environmental Degradation: A Conditional Nonparametric Frontier Analysis”, Environmental Economics and Policy Studies, 21(2), 325-347.

Hansen, B.E. (1999), “Threshold Effects in Non-dynamic Panels: Estimation, Testing and Inference”, Journal of Econometrics, 93(2), 345-368.

Im, K.S., M.H. Pesaran and Y. Shin (2003), “Testing for Unit Roots in Heterogeneous Panels”, Journal of Econometrics, 115(1), 53-74.

Kao, C.D. (1999), “Spurious Regression and Residual-Based Tests for Cointegration in Panel Data”, Journal of Econometrics, 90(1), 1-44.

Lankoski, L. (2008), “Corporate Responsibility Activities and Economic Performance: A Theory of Why and How they are Connected”, Business Strategy and the Environment, 17(8), 536-547.

Lee, C.C., Y.B. Chiu and C.H. Chang (2013), “Insurance Demand and Country Risks: A Nonlinear Panel Data Analysis”, Journal of International Money and Finance, 36, 68-85.

Levin, A., C.F. Lin and C.S.J. Chu (2002), “Unit Root Tests in Panel Data: Asymptotic and Finite-sample Properties”, Journal of Econometrics, 108(1), 1-24.

Mankiw, N.G., D. Romer and D. Weil (1992), “A Contribution to the Empirics of Economic Growth”, Quarterly Journal of Economics, 107(2), 407-437.

Markandya, A., A. Golub and S. Pedroso-Galinato (2006), “Empirical Analysis of National Income and SO2 Emissions in Selected European Countries”, Environmental and Resource Economics, 35(3), 221-257.

Owoye, O. and Onafowora, O.A., (2017), “Achieving Sustainable Economic Growth and Development in Communities across the United States”, Economia Internazionale/International Economics, 70(3), 391-410.

Palmer, K., W.E. Oates and P.R. Portney (1995), “Tightening Environmental Standards: The Benefit-cost or the No-cost Paradigm?”, Journal of Economic Perspectives, 9(4), 119-132.

Pedroni, P. (1999), “Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors”, Oxford Bulletin of Economics and Statistics, 61(S1), 653-670.

Pedroni, P. (2004), “Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis”, Econometric Theory, 20(3), 597-625.

Pesaran, M.H. (2007), “A Simple Panel Unit Root Test in the Presence of Cross-section Dependence”, Journal of Applied Econometrics, 22(2), 265-312.

Porter, M.E. (1991), “America’s Green Strategy”, Scientific American, 264(4), 168.

Porter, M.E. and C. Van der Linde (1995), “Toward a New Conception of the Environment-Competitiveness Relationship”, Journal of Economic Perspectives , 9(4), 97-118.

Reinhardt, F. (1999a), “Market Failure and the Environmental Policies of Firms: Economic Rationales for ‘Beyond Compliance’ Behavior”, Journal of Industrial Ecology, 3(1), 9-21.

Reinhardt, F. (1999b), “Bringing the Environment down to Earth”, Harvard Business Review, 77(4) , 149-157.

Salzmann, O., A. Ionescu-Somers and U. Steger (2005), “The Business Case for Corporate Sustainability: Literature Review and Research Options”, European Management Journal, 23(1), 27-36.

Sephton, P. and J. Mann (2013), “Further Evidence of the Environmental Kuznets Curve in Spain”, Energy Economics, 36, 177-181.

Stern, D.I., M.S. Common and E.B. Barbier (1996), “Economic Growth and Environmental Degradation: The Environmental Kuznets Curve and Sustainable Development”, World Development, 24(7), 1151-1160.

Swamy, A.V. and B. Fikkert (2002), “Estimating the Contributions of Capital and Labor to GDP: An Instrumental Variable Approach”, Economic Development and Cultural Change, 50(3), 693-708.

Tsurumi, T. and S. Managi (2012), “The Effect of Trade Openness on Deforestation: Empirical Analysis for 142 Countries”, Environmental Economics and Policy Studies, 16(4), 305-324.

Wagner, M. and S. Schaltegger (2004), “The Effect of Corporate Environmental Strategy Choice and Environmental Performance on Competitiveness and Economic Performance: An Empirical Study of EU Manufacturing”, European Management Journal, 22(5), 557-572.

Wagner, M., S. Schaltegger and W. Wehrmeyer (2001), “The Relationship between the Environmental and Economic Performance of Firms”, Greener Management International, 34, 95-108.

Walley, N. and B. Whitehead (1994), “It’s not Easy Being Green”, Harvard Business Review, 72, 46-52.

Wendling, Z.A., J.W. Emerson, A. de Sherbinin and D.C. Esty (2020), “2020 Environmental Performance Index”, Yale Center for Environmental Law & Policy, New Haven, CT, <>.

Xie, R.H., Y.J. Yuan and J.J. Huang (2017), “Different Types of Environmental Regulations and Heterogeneous Influence on ‘Green’ Productivity: Evidence from China”, Ecological Economics, 132, 104-112.

Register your account

First-time users should click on “Register your account” and enter the requested information. Upon successful registration, you will receive an e-mail with instructions to verify your registration.

Submission Guidelines

Authors’ login

Use the assigned user ID and password to login. Please, do not register again. Usernames and passwords may be changed after.

Quick search by author:
Back to the top

Institute for International Economics
of the Genoa Chamber of Commerce

Istituto di Economia Internazionale
Camera di Commercio di Genova
Via Garibaldi, 4 (III piano) - 16124 Genova (Italy)