Impact of Corruption and Income Inequality on Environmental Degradation: An Analysis of Selected South Asian and East Asian Countries
Author: Saba Pervez

The present study has investigated the impact of corruption and income inequality on environmental degradation, in selected South Asian (Pakistan, India, Bangladesh, Srilanka) and East Asian (China, South Korea, Japan, Malaysia) countries for the period of 1984-2012. CO2 emissions has been taken as indicator of environmental degradation. The research has applied the panel co-integration techniques for analyzing both the long run and short run relationship. Using Im, Pesaran and Shin (IPS) (2003), the results indicate that all the variables are integrated of order one. After this, Pedroni (1999) test detected co-integration among all the variables of the study. The study has estimated the long run relationship through Dynamic Ordinary Least Square (DOLS) test. The results indicate that the Environment Kuznets curve hypothesis exists for both South Asian and East Asian regions in the long run, whereas corruption and income inequality are positively associated with CO2 emissions. Finally, Error correction mechanism for panel study is applied on the basic and augmented EKC models. Short run results suggest that Environmental Kuznets curve hypothesis holds in South Asia even in the short run, and corruption and income inequality are found to have positive impact on CO2 emissions. EKC is not proved for East Asia in short run and all other explanatory variables including corruption and income inequality have insignificant impact on CO2 emissions except per capita energy consumption. Moreover, corruption and income inequality delay the turning point of EKC in both regions. According to the ECM result, disequilibrium in CO2 emissions within a year is corrected by 14 percent for South Asia and 26 percent for East Asia. Overall, the results indicate that the impact of corruption and income inequality on CO2 emissions is high in South Asia, as compare to East Asia. Supervisor:- Dr. Shujaat Farooq

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Keywords : CORRUPTION, East Asian Countries, Environmental Degradation, Income Inequality, South Asian Countries
Supervisor: Shujaat Farooq

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