This paper examines causal relationships between environment, GDP and trade for Iran using annual data over the period 1970-201, applying the techniques of the long–run Granger non–causality test proposed by Toda and Yamamoto (1995). The results suggest that there is a long-run relationship between these variables. CO2 emissions have a positive long-run relationship with per capita income, indicating economic growth tends to worsen environmental quality. In addition, CO2 emissions have a positive long-run relationship with openness, supporting for the so-called race-to-the bottom hypothesis for developing countries. The Granger Causality test indicates strong unidirectional effects from GDP to CO2 emissions.
Copyright: © 2018 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode