Carbon Kuznets curve: a dynamic empirical approach for a panel data

Abstract The Environmental Kuznets curve (EKC) relationship is defined as an inverted‐U association between income and pollution. However, it remains a hypothesis since the empirical evidence is mixed. A key limitation in previous studies is that they ignore the endogenous relationship between income and pollution. To address this issue, a dynamic system generalised method of moments (GMM) was utilised with a large sample of countries and a long time series. After controlling for country‐specific fixed effects, the dynamic feedback between income and environmental damage, and several controls, we find support for the EKC hypothesis in our sample.