Corruption and the Environmental Kuznets Curve in Developed and Developing Countries

This study examines the relationship between per capita income and per capita dioxide emissions in the form of a new definition of the Environmental Kuznets Curve, to investigate how corruption influences the income level at the turning point of the relationship between per capita dioxide emissions and income, in developed and developing countries the period 1994-2013 through the use of a panel data model. Our results support the Environmental Kuznets Curve hypothesis for developed countries and existence of an U-shaped relation for developing countries. We find evidence that the higher the country's degree of corruption, the higher the per capita income at the turning point for developed countries and the lower the per capita income at the turning point for developing countries than when corruption is not accounted for. Also, the share of renewable energy in both groups of countries has a negative and significant effect on per capita dioxide emissions, but the positive effect of urbanization rate in developed countries is significant and in developing countries is not.