Revisiting the environmental Kuznets curve hypothesis using innovation: new evidence from the top 10 innovative economies

Gormus, Sakir; Aydin, Mucahit

Revisiting the environmental Kuznets curve hypothesis using innovation: new evidence from the top 10 innovative economies

2020

Gormus, Sakir | Aydin, Mucahit

The aim of this study is to examine the relationship between ecological footprint, economic growth, renewable energy consumption, and innovation within the framework of the environmental Kuznets curve (EKC) hypothesis for the top 10 innovative economies, namely, Denmark, Finland, Germany, Israel, Korea, The Netherlands, Sweden, Switzerland, the UK, and the USA, in the period of 1990–2015. For this purpose, the long-term relationship between variables was examined with a panel cointegration test. The results show that the variables in the EKC model move together in the long run. According to the long-run estimation results, the EKC hypothesis is valid for Israel, but not for the other countries. The study also makes the following observations: (i) For Korea, the USA, Finland, and the whole panel, innovation appears to reduce environmental pollution. (ii) Renewable energy consumption reduces environmental pollution for Denmark, Germany, The Netherlands, and the USA. (iii) Globalization has an impact on the reduction of environmental pollution for Germany and Switzerland. As a result, developing policies on the use of more innovative technologies in the countries studied will have a positive impact on environmental pollution. Graphical abstract

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