EKC HYPOTHESIS AND THE EFFECT OF INNOVATION: A PANEL DATA ANALYSIS

Abstract

 In recent years, sustainable development has represented one of the most important aims of the economic policy explored in the environmental Kuznets curve (EKC) literature. The present paper contributes to this ongoing literature by comparing two different EKC specifications for 27 developed countries over the period 1997-2009 using panel data methods. It is found an N-shaped relationship between CO2 per capita and GDP per capita which differs from the traditional U-shaped EKC. The paper also examines the possible effects of innovative investments and industrial production on the environmental Kuznets curve (EKC) for CO2 emissions.

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