This paper investigates the causal relationship between environmental quality, economic growth and trade in D8 countries by using panel unit root tests and panel cointegration analysis for the period 1970-2011. The results suggest that there is a long-run relationship between these variables. Emissions have a positive long-run relationship with per capita income and trade. Moreover, the results show a unidirectional strong causality from economic growth to environment in these countries. We also find no causality between emissions and trade.
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