Does trade openness convey a positive impact for the environmental quality? Evidence from a panel of CIS countries

Figures & data

Table 1. Brief literature review on EKC and trade openness.

Author	Country/region, Period	Variables used in the study	Results
Jalil and Mahmud (2009)	China, 1971–2005	CO2 emissions, commercial energy use, real income, trade openness	The EKC hypothesis is supported; trade openness decreases CO2 emissions, but statistically insignificant
Halicioglu (2009)	Turkey, 1960–2005	CO2 emissions, GDP, energy consumption, trade openness	The EKC hypothesis is supported; trade openness increases CO2 emissions, but statistically insignificant
Managi, Hibiki, and Tsurumi (2009)	88 countries, 1973–2000	SO2, CO2^,, BOD emissions, GDP, trade openness, capital-labor ratio, relative capital-labor ratio, relative GDP, international environmental treaties	The inverted U-shaped EKC of SO2 and CO2 is verified, trade openness reduces CO2 and SO2 emissions in OECD but increases in non-OECD significantly
Tamazian and Rao (2010)	24 transition economies, 1993–2004	CO2 emissions, GDP, Inflation, FDI, Price liberalization, forex and trade liberalization, trade openness, financial liberalization, institutional quality, energy import, energy consumption,	The EKC hypothesis is supported; trade openness increases CO2 emissions significantly
Sharma (2011)	69 countries, 1985–2005	CO2 emissions, GDP, energy consumption, urbanization, trade openness	The EKC does not apply; trade openness at any level of income does not have a significant effect on co2
Al-Mulali (2012)	12 Middle Eastern countries, 1990–2009	CO2 emissions, GDP, FDI, energy consumption, trade openness	The EKC does not apply; trade openness increases CO2 emissions significantly
Kasman and Duman (2015)	15 EU member and candidate countries, 1992–2010	CO2 emissions, GDP, energy consumption, trade openness and urbanization.	The EKC hypothesis is supported, trade openness increases CO2 emissions significantly

Table 2. Data definition and sources.

Variables	Definition	Unit	Data source
GDPpc	Per capita GDP	Constant 2010 USD	WDI, World Bank
CO2pc	Per capita carbon dioxide emissions	Metric tons	WDI, World Bank
TO	(Export + Import)/GDP	%	WDI, World Bank
CSPW	Capital stock per worker	Constant 2010 USD	WDI, World Bank
IND	Share of industrial output in GDP	%	WDI, World Bank
POPU	Total population between the ages 15 to 64	Number of person	WDI, World Bank
INFL	Rate of inflation, GDP deflator	%	WDI, World Bank
ENERGY	Primary energy consumption	kg of oil equivalent per capita	WDI, World Bank
RENCON	Renewable energy consumption	% of total final energy consumption	WDI, World Bank
REGU	Regulatory Quality	Scale	WGI, World Bank
TRAN	Mean value of six indicators of assessment of progress in a transition economy	Scale	ATQ, EBRD
WTO	Dummy variable for the WTO membership.	0,1	WTO
Landlocked	Dummy variable for the country’s location.	0,1	National statistic agencies

Table 3. Summary statistics of key variables for each country.

	Per capita CO2		Per capita GDP		Trade Openness
Countries	Mean	Std.	Mean	Std.	Mean	Std.
Armenia	1.49	0.32	2751.68	815.73	0.68	0.08
Azerbaijan	3.78	0.31	4001.64	1777.48	0.7	0.1
Belarus	6.16	0.57	4724.72	1382.32	1.27	0.1
Kazakhstan	12.46	2.72	7704.88	1867.16	0.9	0.13
Kyrgyzstan	1.23	0.29	805.89	105.52	1.35	0.21
Moldova	1.27	0.15	1431.97	284.35	1.16	0.19
Russian Federation	11.5	0.69	9462.02	1844.99	0.46	0.06
Tajikistan	0.36	0.05	637.73	136.93	0.63	0.06
Uzbekistan	4.4	0.56	1149.47	279.91	0.49	0.17
Ukraine	6.65	0.47	2746.75	487.92	1.09	0.1
Panel	4.93	4.19	3543.78	3068.95	0.87	0.34

Note: Std. stands for standard deviation; per capita CO₂ is measured in metric tons, per capita GDP is measured in constant 2010 US$.

Table 4. Estimation of the impact of trade openness on income.

LogGDPpc	Exogenous Trade Openness	Endogenous Trade Openness
TO	−0.1957** (0.0853)	−0.2908** (0.1248)
ln CSPW	0.1722*** (0.0431)	0.8216*** (0.0282)
IND	2.12e-13 (5.27e-13)	2.25e-13 (2.59e-13)
ln POPU	0.6016*** (0.1990)	0.0744*** (0.0198)
INFL	0.0003 (0.0006)	0.0009 (0.0009)
Time Trends	Controlled	Controlled
R^2	0.4837	0.9410
Obs.	140	140
F test	42.97***
Wald Chi2		1970.47***
Hausman test	42.61***
Sargan test		1.8113
F test on IV		21.374***

Notes: Significance level in parentheses (probabilities for Sargan and F test). ***, **, * denote statistical significance at 1%, 5% and 10%, respectively.

Table 5. Estimation of the impact of trade openness on per capita CO₂ emissions.

ln CO2pc	(M1)	(M2)
ln GDPpc	0.9736*** (0.1282)	0.9202*** (0.1759)
ln Square of GDPpc	−0.0545*** (0.0077)	−0.0510*** (0.0111)
ln ENERGY	1.1072*** (0.0174)	1.1273*** (0.0295)
RENCON	−0.0046*** (0.0006)	−0.0037*** (0.0008)
REGU	−0.2772*** (0.0329)	−0.2805*** (0.0425)
TRAN	0.2972*** (0.0321)	0.2989*** (0.0399)
TO		0.0558** (0.0235)
Time Trends	Controlled	Controlled
Obs.	130	130
Wald Chi2	99,105.18***	82,563.44***

Notes: Significance level in parentheses. ***, **, * denote statistical significance at 1%, 5% and 10%, respectively.

Table 6. Estimation of the total impact of trade openness on CO₂ emissions.

Direct effect	Indirect effect	Total effect
0.0736	−0.3505	−0.2769

Note: The indirect effect is calculated using the sample median level of GDP per capita ($2572)

Table 7. Estimation of the impact of exporting and importing industries on per capita CO₂ emissions.

Log(CO2pc)	IMP	EXP
ln GDPpc	0.0690*** (0.0175)	0.1239*** (0.0265)
ln IMP/GDP	−0.0467*** (0.0116)
ln EXP/GDP		0.2095*** (0.0172)
ln ENERGY	1.0981*** (0.0197)	1.0563*** (0.0294)
RENCON	−0.0071*** (0.0004)	−0.0051*** (0.0006)
REGU	−0.2097*** (0.0327)	−0.3061*** (0.0461)
TRAN	0.2282*** (0.0283)	0.2909*** (0.0449)
Time Trends	Controlled	Controlled
Obs.	130	140
Wald Chi2	73,068.71***	56,345.43***

Notes: Significance level in parentheses. ***, **, * denote statistical significance at 1%, 5% and 10%, respectively.

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