Asymmetric openness-environment nexus in most open OIC countries: new evidence from quantile-on-quantile (QQ) estimation
2022
ʻAlī, Sājid | Yusop, Zulkornain | Meo, Muhammad Saeed
Trade openness continues to have the potential to influence many parts of today’s society, including religion, transportation, lifestyle, language, and international relations; however, its ability to impact environmental quality is the primary issue for environmental policy guidelines. In response to an increasing interest in finding the dynamic association between trade openness and environmental quality, the current study explores the trade openness- environmental quality nexus in the ten most open Organization of Islamic Cooperation (OIC) countries for the years 1991 to 2018. By taking CO₂ emissions and ecological footprint as environmental indicators, a novel methodology “quantile-on-quantile (QQ)” is used to indicate how different quantiles of trade openness asymmetrically affect the quantiles of environmental indicators by providing an adequate pattern to comprehend the overall dependence structure. A negative openness-CO₂ emissions association is dominant in seven out of ten selected OIC countries (i.e., Suriname, Malaysia, Jordan, UAE, Libya, Brunei, and Qatar). On the other hand, a positive impact of trade openness on ecological footprint is dominant in eight out of ten selected OIC countries (i.e., Oman, Jordan, UAE, Libya, Bahrain, Brunei, Qatar, and Kuwait). The outcomes indicate that the asymmetric strength of openness-induced environmental quality differs with countries at both upper and bottom quantiles of data distribution that need specific attention in contending trade and environment policies in OIC countries.
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