The Comparison of the Environmental Kuznets Curve in Developing and OECD Countries: A Panel Data Analysis

This study attempts to investigate the relationship between pollution and economic growth for two groups of countries according to Environmental Kuznets Curve hypothesis for a sample of 24 developing countries and 26 OECD countries over the period 1980 - 2005. Then, we examine this hypothesis using modern econometrics techniques including panel co-integration and panel unit-root. The panel data analyses do support the inverted u-shaped Environmental Kuznets Curve hypothesis in both groups of countries. Also, the results which extracted from estimating and forecasting, confirm that in developing countries higher economic growth causes more environmental distortion. While for OECD countries, economic growth improve the quality of environment.