ORIGINAL RESEARCH
Greening Global Competitiveness: Analyzing the Environmental Kuznets Curve in Developing Economies in the Light of Economic Fitness and Global Integration
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1
School of Logistics, Chengdu University of Information Technology, Chengdu, Sichuan 610103, China
 
2
Department of Economics, Division of Management and Administrative Science, University of Education Lahore, Pakistan
 
3
School of Economics and Finance, Queen Mary University of London, United Kingdom
 
 
Submission date: 2024-06-24
 
 
Final revision date: 2024-09-04
 
 
Acceptance date: 2024-10-13
 
 
Online publication date: 2025-03-14
 
 
Corresponding author
Ruilin Xiang   

School of Economics and Finance, Queen Mary University of London, United Kingdom
 
 
 
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ABSTRACT
Human life is greatly affected by increasing globalization, which has strong environmental implications in developing nations. Moreover, nations have experienced major transformations in their production structures to maintain their competitive positions in the global market. Therefore, this study aims to analyze the individual and synergistic impacts of globalization (GLOB) and economic fitness (ECF) on CO2 emissions in light of the environmental Kuznets curve (EKC) hypothesis in developing nations. The panel corrected standard error and system generalized moments methods have provided robust evidence for the existence of the EKC hypothesis based on a panel of 79 developing nations from 1995 to 2019. Moreover, GLOB (=0.60, p<0.01) and ECF (= 0.003, p<0.01) had a significant and positive impact on CO2 emissions. They concluded that diversified exports, trade openness, and economic expansion in developing nations cause high emissions. In contrast, the model revealed a significant and positive (= 0.082, p<0.01) impact of the interaction term (ECF*GLOB). It was observed that ECF moderates the impact of GLOB on CO2 emissions, as high ECF in economies increases their GLOB by increasing production scale to enhance their trade, which leads to environmental degradation. However, the findings also show that developing nations have experienced earlier turning points as compared to the baseline model and their individual impact on ECK trajectories because ECF and GLOB simultaneously expand production scale and trade volume. Thus, developing nations must develop strong institutional frameworks with strict implementation and enforcement of environmental regulations, environmentally oriented trade policies, sustainable infrastructure, and environment-oriented international cooperation to obtain a favorable impact of ECF and GLOB on domestic environmental quality.
eISSN:2083-5906
ISSN:1230-1485
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