Environmental Kuznets Curve (EKC)

What is it about?

The present study examines the presence of Environmental Kuznets Curve (EKC) in Malaysia by investigating impact of globalization (including overall, social, economic and political) on ecological footprint in the Malaysian economy using quarterly data from 1970 to 2018. This research utilizes the Quantile Autoregressive Distributed Lag (QARDL) method. This approach is useful as it depicts the causality patterns through various quantiles of the globalization and environmental degradation by providing more comprehensive explanations of the over-all dependence among the aforementioned variables almost ignored by the traditional approach (for instance ARDL and OLS). The outcomes of QARDL showed that the error correction coefficient is significant with the anticipated negative sign for all quantiles. This outcome provides evidence on the presence of considerable return to the long-run equilibrium association between the factors of interest and environmental degradation. Overall, the results recommended that overall globalization and economic globalization enhance the level of environmental degradation in the long run, however, political and social globalization help to reduce the level of environmental degradation in the long term. Moreover, the results of QARDL also confirmed the existence of inverted U-Shape curve in the Malaysian economy. In the shorter-run period, this study found a significant negative impact of overall globalization and political globalization on environmental degradation. The results recommended that the Malaysian government and policymakers need to give more attention to social and political globalization to achieve the goals of sustainable environment in the long-run equilibrium.

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Why is it important?

The present study examines the presence of Environmental Kuznets Curve (EKC) in Malaysia by investigating impact of globalization (including overall, social, economic and political) on ecological footprint in the Malaysian economy using quarterly data from 1970 to 2018. This research utilizes the Quantile Autoregressive Distributed Lag (QARDL) method. This approach is useful as it depicts the causality patterns through various quantiles of the globalization and environmental degradation by providing more comprehensive explanations of the over-all dependence among the aforementioned variables almost ignored by the traditional approach (for instance ARDL and OLS). The outcomes of QARDL showed that the error correction coefficient is significant with the anticipated negative sign for all quantiles. This outcome provides evidence on the presence of considerable return to the long-run equilibrium association between the factors of interest and environmental degradation. Overall, the results recommended that overall globalization and economic globalization enhance the level of environmental degradation in the long run, however, political and social globalization help to reduce the level of environmental degradation in the long term. Moreover, the results of QARDL also confirmed the existence of inverted U-Shape curve in the Malaysian economy. In the shorter-run period, this study found a significant negative impact of overall globalization and political globalization on environmental degradation. The results recommended that the Malaysian government and policymakers need to give more attention to social and political globalization to achieve the goals of sustainable environment in the long-run equilibrium.

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