Economic growth and environmental degradation: evidence from Heckscher-Ohlin theory and Environmental Kuznets Curve hypothesis / Abby Christie Clarnce

The relationship between economic growth and environmental degradation has been one of the debateable issues for researcher to study lately as it attracts a lot of attention. Most studies focused on macroeconomic field whereby the nations are restricted to specific regions only. This study aims to investigate the relationship between economic growth and environmental degradation (proxied by CO2 emission). The researcher employed the Heckscher-Ohlin theory, specifically the factor abundance in segregating and choosing the countries. The countries are segregated into two types; K-abundant and L-abundant nations. To determine whether there are significant difference between countries, researcher puts an extra effort by considering whether there is a significant
difference between the factor abundance towards the environmental degradation. The reason of segregating the data into two groups will help us to identify the significant difference between K and L abundant. This study also re-examines whether there is an existence of Environmental Kuznets Curve (EKC) hypothesis when the countries are segregated into K and L abundant nations. Therefore, there are a total of 102 countries chosen and the time period covers from 1995 until 2014. Furthermore, this research applied Panel Pooled Ordinary Least Square (OLS) and polynomial form to determine the existence of Environmental Kuznets Curve (EKC) hypothesis. The empirical result revealed economic growth and environmental degradation posed a positive relationship
between them in all estimations despite the difference in factor abundance. The Environmental Kuznets Curve was only valid in L-abundant nations as there was a turning point.