Modelling Urbanization, Economic Growth, and Ecological Footprint Using Environment Kuznets' Curve in Selected Asian Countries

Abstract

This paper examines the relationship between urbanization, economic growth, and environmental quality using environmental Kuznets curve (EKC) hypothesis. The hypothesized link is tested using time-series analysis of 10 selected Asian countries over the period 1990-2018. First, the EKC hypothesis is tested through examining the relationship between EF, GDP, and URB. Further, the long-run relationship between EF, URB, and GDP is investigated using a vector error correction model. It was found that there is a cointegrated relationship between the variables in the countries China, Malaysia, and Thailand. Additionally, almost all error correction terms are correct in sign and are significant, which implies that some percentage of disequilibrium in EF in the previous year adjusts back to the long-run equilibrium in the current year. Therefore, an efficient trade-off between environmental protection and economic benefits should be taken, and EF should be reduced through changing consumption patterns, improving the efficiency of use of resources and cleaner technology choices.