Revisiting the Environmental Kuznets Curve hypothesis in OECD during 1970-2016: Panel smooth transition regression

The examination of the Environmental Kuznets Curve (EKC) hypothesis is revisited in the OECD countries during 1970-2016. This paper focuses on some OECD countries with a high economic level and a high concentration of air pollution monitoring. In this examination, we propose a Panel smooth transition kink regression (PSTKR) model to examine the inverted U-shaped nexus between economic development and air quality and define the turning point of this relationship. This model allows the slope of the independent variable to be changed after the kink point, leading us to capture the nonlinear relationship between the dependent and independent variables. This study uses the GDP per capita and Sulfur dioxide emissions as economic and development indicators, respectively. Our finding reveals the existence of the EKC hypothesis in the OECD countries. Furthermore, we find the heterogeneous impacts of economic growth on air quality. There is evidence of the positive effects of economic growth on air pollution when the GDP per capita is less than 26,338.84 USD, while it turns out to be harmful when the GDP per capita is more than 26,338.84 USD. In sum, our model confirms the presence of EKC in the OECD countries. (C) 2022 The Author(s). Published by Elsevier Ltd.