The Impact of Economic Structure to the Environmental Kuznets Curve (EKC) Hypothesis: Evidence from European Countries

Abstract

The purpose of this study is to examine the role of economic structure of European countries into testing the Environmental Kuznets Curve (EKC) hypothesis for European countries for the period 1980 to 2014. This study is inspired by the work of Lin et al. (J Clean Prod 133:712-724, 2016), which made the first effort to investigate the phenomenon looking only at African countries. The main finding of the study is that the overall economic growth is the factor with which CO2 emissions exhibit an inverted U-shaped relationship in the studied country group. On the contrary, when using their industrial share as a proxy to capture the countries' economic structure, the EKC hypothesis is not confirmed - but a U-shaped relationship is confirmed. The industrial share decreases emissions through the development and absorption of technologies that are energy efficient and environmental friendly. The EKC hypothesis is confirmed when the aggregate GDP growth is considered, taking into account the improvement of the overall economic conditions of the countries regardless of the economic structure and role of industrialization.