Investigating the Impact of Human Capital on the Relationship between Environmental Pollution and Economic Growth in MENA Countries

Subject Areas : Environmental Economics

azam hajiaghajani ¹ , kambiz hojabr kiani ² , Ali Emami Meibodi ³ , kambiz peykarjou ⁴

1 - student at department of economics,faculty of management and economicsو Islamic Azad University, science and research,tehran,iran
2 - Professor, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran *(Corresponding Author)
3 - Associate Professor, Department of Economics, Allameh Tabataba’i University, Tehran, Iran
4 - Assistant Professor, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran

Received: 2018-09-13 Accepted : 2018-12-12 Published : 2020-07-22

Keywords: Economic growth, Environmental pollution, Human Capital,

Abstract :

Background and Objective: The economic growth model can examine the direct and indirect effects of human capital on economic growth. One of the indirect factors is environmental pollution. But in the meantime, one should not overlook the limitations of the advocates of this theory, such as the Impact of Human Capital Utilization on reducing environmental pollution, in order to achieve goals and policies similar to those of developed economies. Therefore, the purpose of this research is to investigate the impact of human capital on Kuznets’ emphasized relationship, the threshold relation of environmental pollution and economic growth. Method: Therefore, using the data from 14 countries in the MENA area for the period 2000 - 2016, the Generalized Method of Moment (GMM) or dynamic data panel method was used to test the hypothesis. Findings: The relationship between environmental pollution (CO2 emissions) and economic growth is nonlinear and the Kuznets curve hypothesis in the selected research sample confirms the existence of an inverse U-shaped relationship between economic growth and pollution emissions. Higher the human capital with the current level of greenhouse gas emissions, lead to the higher economic growth in selected countries. Discussion and Conclusion: Increased growth due to the accumulation of human capital can play a moderating role on the negative relationship between environmental pollution and economic growth of the selected research set. With the increase of human capital at any level of environmental pollution, the threshold point of the negative relationship between environmental pollution and economic growth is delayed. In other words, as knowledge-based and human capital-based development increases the negative relationship between environmental pollution and economic growth is moderated.  

References:

1. Barro, R.J., 1991.Economic growth in a cross section of countries. Q. J. Econ. 106(2), pp. 407– 443.


2. Grossman, G.M., 1995. Pollution and growth: what do we know? In: Goldin I, Winters LA (eds) The economics of sustainable development. Cambridge University Press, Cambridge.


3. Marsiglio, S., Ansuategi, A., Gallastegui, M. Carmen., 2016.The environmental Kuznets curve and the structural change hypothesis. Environmental and Resource Economics, 63 (2), pp. 265-288.


4. Grossman, G.M., Krueger AB., 1991. Environmental impacts of the North American Free Trade Agreement. NBER working paper no 3914.


5. Teixeira, A.A.C., Queirós, A.S.S., 2016. Economic growth, human capital and structural change: A dynamic panel data analysis. Res. Policy, http://dx.doi.org/10.1016/j.respol.2016.04.006


6. Solow, R.M., 1959.Investment and Technology progress.In Arrow K.Karbin. S.8 Suppes, P. (Eds), Mathematical Methods in the social Science, Stanford University press, Stanford.


7. Lucas, R.E., 1988.On the mechanics of economic development.Journal of Monetary Economics. vol. 22, pp. 3-12


8. Romer, P.M., 1990. Endogenou Technological Change Journal of Political Economy. PP. 71-102.


9. Mankiw, N., R. D., Weil, D., 1992.A contribution to the empirics of economic growth. Quarterly Journal of Economics.107, pp. 112-128.


10. Salehi, S., Firoozjayan, A.A., Gholam Razzadeh, F., 2015. Environmental Discourse Analysis of Socio-Economic Development Programs of Islamic Republic of Iran. Quarterly Journal of Welfare and Social Development Planning, No. 21, 71-108. (In Persian)


11. Azam khan, Muhammad., Qayyum Khan, Abdul., Bin Abdullah, Hussin., Ejaz Qureshi, Muhammad.,  2015. The impact of CO2 emissions on economic growth: evidence from selected higher CO2 emissions economies. Environmental Science and Pollution Research,   https://www.researchgate.net/publication/285383978


12. Azlina, A.A., Law, S.H. Mustapha, N.H.N., 2014.Dynamic linkages among transport energy consumption, income and CO2 emission in Malaysia. Energy Policy 73:598–606.


13. Papiez, M, 2013. CO2 emissions, energy consumption and economic growth in the Vise grad Group countries: a panel data analysis. 31st International Conference on Mathematical Methods in Economics 2013, pp. 696–701.


14. Mousavi, S.S.A., Haghighat, J., Salmani, M.R., 2015.The Impact of Human Capital on Economic Growth in Iran (Nonlinear Approach). Iranian Economic Research, pp. 121-144. (In Persian)


15. Hunsson, J. A., 1999.Specification Tests in Econometrics. Econometrica, 46, pp. 1251–1272.


16. Arellano, M., Bond, S., 1991. Some tests of specification for panel data: Monte Carol evidence and application to employment equation. Review of Economic Studies, 58(2), pp. 117-142.

2. Mankiw, N.G., Romer, D., Weil, D.N., 1992. A contribution to the empiric’s of economic growth. Q. J. Econ. 107 (2), pp. 407–437.


3. Mauro, P., 1995.Corruption and growth. Q. J. Econ. 110 (3), pp. 681–712.

8. Goldin, C., 2016.Human capital. In: Die bolt, C., Huppert, M. (Eds.), Handbook of Clio metrics. Springer-Verlag, Berlin, Heidelberg, pp. 55–86.

13. Hall, R.E., Jones, C.I., 1999. Why do some countries produce so much more output per worker than others? Q. J. Econ. 114 (1), pp. 83–116.


14. Benos, N., Zotou, S., 2014. Education and economic growth: a meta-regression analysis. World Dev. 64, pp. 669–689.


15. Benhabib, J., Spiegel, M.M., 1994.The role of human capital in economic development evidence from aggregate cross-country data. J. Monetary. Econ.34, pp. 143–173.


16. Bodman, P., Le, T., 2013.Assessing the roles that absorptive capacity and economic distance play in the foreign direct investment-productivity growth nexus.Appl. Econ. 45 (8), pp. 1027–1039.


17. Nelson, R.R., Phelps, E.S., 1966. Investment in humans, technological diffusion and economic growth. Am. Econ. Rev. 56 (1/2), pp. 69–75.


18. Easterly, W., Levine, R., 1997. Africa’s growth tragedy: policies and ethnic divisions’. J. Econ. 112 (4), pp. 1203–1250.

24. Pajouyan, J., Tabriz, B., 2010.Study of the relationship between economic growth and environmental pollution using a dynamic simulation model. Economic research journal, year 10, no. 38 (after 3), pp. 203-175. (In Persian)

26. Kao, C., 1999.Spurious Regression and Residual-Based Tests for Cointegration in Panel Data. Journal of Econometrics, 90, pp. 1–44.