Testing non-linear effect of urbanization on environmental degradation: Cross-country evidence

The contribution of structural transformation and urban development is considered crucial for the long run socio-economic growth but has adversely affected environmental sustainability over last few decades. This empirical research makes an innovative holistic addition to prior literature by examining non-linear effect economic dynamics on degradation in a comprehensive panel data 66 countries across respective income groups period 1990–2016. For analysis, robust econometric methods two-way fixed effects (2W-FE), fully modified ordinary least squares (PFMOLS), Driscoll-Kraay regressions have been applied account all issues. study unveils bell-shaped which confirms Environmental Kuznets Curve (EKC) change hypotheses. results this signifies inverted U influence urbanization agglomerations CO 2 emissions hence supports Ecological Modernization Theory (EMT). Our findings also unfold heterogeneous various categories selected economies. By employing Dumitrescu Hurlin (D-H) (Granger non-causality tests), confirm estimations establish significant unilateral bilateral causal nexus with degradation. verifying existence phenomenon Low Lower Middle Income (LLMI) Upper (UMI) group countries, necessitates policy makers adopt eco-friendly industrial energy policies social, sustainability.