A revisit of the globalization and carbon dioxide emission nexus: evidence from top globalized economies

This study examines the environmental Kuznets hypothesis with specific consideration on the role of globalization in the top 50 globalized countries from 1980 to 2014. We apply unique and advanced econometric techniques of panel data to analyze the cross-sectional independence and control the heterogeneity between cross sections. The CIPS unit root test, Westerlund (2007) bootstrap cointegration, Pedroni cointegration, fully modified ordinary least square (FMOLS), and heterogeneous panel causality technique have been applied. The results confirm that all the variables are co-integrated in the long run. The results also show that globalization has a positive effect on environmental degradation. Furthermore, the results of FMOLS also confirming the presence of the Kuznets hypothesis that is inverted U-shaped relationship between CO2 emission and gross domestic product, and heterogeneous panel causality technique confirms bidirectional causal relationship between foreign direct investment and CO2 emission. This study provides valuable policy implications for the government and the policymakers, they should adopt environmentally friendly technology for economic growth to decarbonizes the environment, also use renewable energy sources to meet energy demand.-