Volume 25, Issue 1 (2025)
QJER 2025, 25(1): 113-138 |
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kheirollahi zaki H, sadeghi K. Globalization, Export Diversification and Environmental Effects in Persian Gulf Countries A Spatial Panel Approach. QJER 2025; 25 (1) : 5
URL: http://ecor.modares.ac.ir/article-18-73404-en.html
URL: http://ecor.modares.ac.ir/article-18-73404-en.html
1- Ph. D. Student of Economics, Department of Economics, Urmia University, Urmia, Iran , hadykhyrallhy@gmail.com
2- Professor of Economics, Department of Management and Economics, University of Tabriz
2- Professor of Economics, Department of Management and Economics, University of Tabriz
Abstract: (437 Views)
Aim and Introduction
Globalization in recent decades has brought developed and developing economies closer to each other through trade, technology transfer, capital flows, bonds, and employment opportunities, and the positive impact of globalization has been linked to the availability of economic advantages. Globalization has certain adverse effects that cause the release of pollutants, ecological imbalances, and issues related to global climate change. The effects of greenhouse gas emissions may adversely affect sustainable economic growth through welfare-reducing channels. Other adverse effects of globalization include environmental damage, price fluctuations, over-specialization, elimination of local industries, and social and industrial deterioration. Economists argue that globalization activities improve domestic economic structure by integrating trade, technology transfer, and financial activities. As a result, the growth of global economic activities may lead to more energy consumption and greenhouse gas emissions.
Achieving sustainable environmental development along with preventing environmental degradation has always been a serious issue for policy makers. Globalization and diversification of exports are one of the most important factors affecting this issue.
In this study, the impact of globalization variables and export diversification on the environment of 7 selected countries of the Persian Gulf is investigated. The focus of this study is on the combination of export diversification and globalization index (from the economic, political and social aspects), to investigate the performance of pollutants and as a result determine the EKC hypothesis in the Persian Gulf countries.
Methodology
In order to conduct an empirical analysis of globalization, export diversity and environmental degradation, we use the panel data approach. The standard approach in spatial econometrics is that one should first start the analysis with a non-spatial model and then check whether the benchmark model needs to be developed by considering spatial interaction effects or not. The used sample includes 7 sections and the time period includes the years 1995 to 2020. The decision to select the sample is based on the availability of data from the World Bank. It will be used to estimate non-spatial fixed and random effects models. The fixed effects model controls for heterogeneity by allowing a separate interval for each cross section. While the random effects model shows the unobserved features of the country in the error term.
Findings
Export diversity has a positive and significant effect on carbon dioxide emissions, therefore creating diversification in exports in Persian Gulf countries will increase carbon dioxide emissions. The issue that has caused the high concentration of the export portfolio in these countries is the focus on the export of oil and gas and petrochemical products, which are inherently polluting industries. The findings also show that economic growth has a negative relationship with CO2 emissions. A one percent increase in economic growth reduces CO2 emissions by 1.67 percent based on the results of the Spatial Panel. The square effect of economic growth is also positive and significant, and this shows that the relationship between CO2 emissions and economic growth is U-shaped, such a U-shaped relationship basically shows that economic growth is not critical in reducing CO2 emissions in the countries in question. Considering that exports in the Persian Gulf countries are highly concentrated in the oil and gas and petrochemical sectors, and these sectors cause high pollution, therefore, the policy implications should be based on supporting the more efficient use of renewable energy in the economy of these countries. It should be noted that investment or tax incentives on technologies that consume renewable energy can be significant policy tools.
Discussion and Conclusion
Sustainability of economic development requires environmental sustainability as part of a dynamic process. The results of this study showed that energy consumption and diversification of exports aggravates environmental degradation in Persian Gulf countries. The variety of export products significantly affects CO2 emissions in selected countries. In fact, export diversification can be useful not only for rapid economic growth but also for environmental pollution management. For example, companies should avoid producing goods that cause high CO2 emissions. This issue should be evaluated in expanding the export portfolio and products with high CO2 emissions can be imported. Of course, all these consequences require accurate knowledge of the scale of environmental pollutants in the economy of countries for each sector. Business and political efforts to diversify the portfolio of export products directly affect environmental quality. Countries can clarify information on capital flows related to investment companies to improve environmental regulations. Developing countries need to adopt efficient and effective environmental practices in activities related to foreign investment. To improve environmental quality from the perspective of energy policy, policymakers should focus on clean energy policies. Improving energy efficiency, investing in renewable resources, increasing the use of cleaner energy sources, and reducing energy intensity are the main options for reducing carbon emissions
Globalization in recent decades has brought developed and developing economies closer to each other through trade, technology transfer, capital flows, bonds, and employment opportunities, and the positive impact of globalization has been linked to the availability of economic advantages. Globalization has certain adverse effects that cause the release of pollutants, ecological imbalances, and issues related to global climate change. The effects of greenhouse gas emissions may adversely affect sustainable economic growth through welfare-reducing channels. Other adverse effects of globalization include environmental damage, price fluctuations, over-specialization, elimination of local industries, and social and industrial deterioration. Economists argue that globalization activities improve domestic economic structure by integrating trade, technology transfer, and financial activities. As a result, the growth of global economic activities may lead to more energy consumption and greenhouse gas emissions.
Achieving sustainable environmental development along with preventing environmental degradation has always been a serious issue for policy makers. Globalization and diversification of exports are one of the most important factors affecting this issue.
In this study, the impact of globalization variables and export diversification on the environment of 7 selected countries of the Persian Gulf is investigated. The focus of this study is on the combination of export diversification and globalization index (from the economic, political and social aspects), to investigate the performance of pollutants and as a result determine the EKC hypothesis in the Persian Gulf countries.
Methodology
In order to conduct an empirical analysis of globalization, export diversity and environmental degradation, we use the panel data approach. The standard approach in spatial econometrics is that one should first start the analysis with a non-spatial model and then check whether the benchmark model needs to be developed by considering spatial interaction effects or not. The used sample includes 7 sections and the time period includes the years 1995 to 2020. The decision to select the sample is based on the availability of data from the World Bank. It will be used to estimate non-spatial fixed and random effects models. The fixed effects model controls for heterogeneity by allowing a separate interval for each cross section. While the random effects model shows the unobserved features of the country in the error term.
Findings
Export diversity has a positive and significant effect on carbon dioxide emissions, therefore creating diversification in exports in Persian Gulf countries will increase carbon dioxide emissions. The issue that has caused the high concentration of the export portfolio in these countries is the focus on the export of oil and gas and petrochemical products, which are inherently polluting industries. The findings also show that economic growth has a negative relationship with CO2 emissions. A one percent increase in economic growth reduces CO2 emissions by 1.67 percent based on the results of the Spatial Panel. The square effect of economic growth is also positive and significant, and this shows that the relationship between CO2 emissions and economic growth is U-shaped, such a U-shaped relationship basically shows that economic growth is not critical in reducing CO2 emissions in the countries in question. Considering that exports in the Persian Gulf countries are highly concentrated in the oil and gas and petrochemical sectors, and these sectors cause high pollution, therefore, the policy implications should be based on supporting the more efficient use of renewable energy in the economy of these countries. It should be noted that investment or tax incentives on technologies that consume renewable energy can be significant policy tools.
Discussion and Conclusion
Sustainability of economic development requires environmental sustainability as part of a dynamic process. The results of this study showed that energy consumption and diversification of exports aggravates environmental degradation in Persian Gulf countries. The variety of export products significantly affects CO2 emissions in selected countries. In fact, export diversification can be useful not only for rapid economic growth but also for environmental pollution management. For example, companies should avoid producing goods that cause high CO2 emissions. This issue should be evaluated in expanding the export portfolio and products with high CO2 emissions can be imported. Of course, all these consequences require accurate knowledge of the scale of environmental pollutants in the economy of countries for each sector. Business and political efforts to diversify the portfolio of export products directly affect environmental quality. Countries can clarify information on capital flows related to investment companies to improve environmental regulations. Developing countries need to adopt efficient and effective environmental practices in activities related to foreign investment. To improve environmental quality from the perspective of energy policy, policymakers should focus on clean energy policies. Improving energy efficiency, investing in renewable resources, increasing the use of cleaner energy sources, and reducing energy intensity are the main options for reducing carbon emissions
Article number: 5
Article Type: Original Research |
Subject:
Economic Development and Growth
Received: 2024/01/14 | Revised: 2025/02/18 | Accepted: 2024/03/4 | Published: 2025/02/18
Received: 2024/01/14 | Revised: 2025/02/18 | Accepted: 2024/03/4 | Published: 2025/02/18
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