The Impact of Economic Complexity on Environmental Pollution

Document Type : Research Paper

Authors

1 Assistant Professor of Economics, Alzahra University, Tehran, Iran

2 MA in Economics, Alzahra University, Tehran, Iran

3 MA in Economics, Allameh Tabataba'i University, Tehran, Iran

Abstract

Today, one of the most important challenges facing the global economy is environmental pollution and climate changes. Improving knowledge and technology can be one of the factors controlling the emission of pollutants. One of the newest indicators that reflects the level of knowledge and technology used in the country's production structure is the economic complexity index. In this study, using data from 99 countries in the period of 1992-2017, the impact of economic complexity as a measure of the level of technology, knowledge and skills of an economy, on environmental pollution in the framework of Kuznets' environmental curve hypothesis has been investigated. Environmental pollution is measured by the carbon dioxide emission. A panel data model with Dynamic Ordinary Least Squares (DOLS) has been used to estimate the relationship between variables. The results of this estimation show that economic complexity has a negative and significant effect on environmental pollution, and also the Kuznets' environmental curve has been empirically confirmed. These results indicate that by improving technology, knowledge and skills in the economy, carbon dioxide emissions can be reduced.

Keywords

References

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Iranian Economic Development Analyses
Volume 7, Issue 2 - Serial Number 20
November 2019
Pages 201-219

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