e-ISSN 2231-8542
ISSN 1511-3701

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Does Equitable Income Distribution Influence Environmental Quality? Evidence from Developing Countries of ASEAN-4

Abdul Rahim Ridzuan, Nor Asmat Ismail, Abdul Fatah Che Hamat, Abu Hassan Shaari Md Nor and Elsadig Musa Ahmed

Pertanika Journal of Tropical Agricultural Science, Volume 25, Issue 1, March 2017

Keywords: Income distribution, environmental quality, ASEAN-4, long run elasticities, Environmental Kuznets Curve

Published on: 29 Mar 2017

This paper investigates income distribution-environment nexus in the context of country-specific time series data from four member states of the Association of South East Asian Nations (ASEAN-4), namely Malaysia, Indonesia, Philippines and Thailand. The short run and long run effects of income inequality, economic growth, domestic investment, trade openness and energy consumption on Carbon Dioxide (CO2 ) emissions were examined by using Autoregressive Distributed Lag (ARDL) estimation. The annual data used in this study covers the period from 1971 to 2013. More equitable income distribution results in better environmental quality for Indonesia and Thailand but leads to a worsening environment in the case of Malaysia. Meanwhile, no significant relationship was detected between income distribution and environmental quality in Philippines. It was also found that domestic investment and energy consumption have beneficial effects on the environmental quality in Indonesia whereas trade openness and the expansion of the economy (GDP) will have a detrimental effect on its environment. However, these variables have shown mixed results in the case of Indonesia, Philippines and Thailand. The main contribution of this study is the introduction of income distribution as a new determinant for environmental quality for these ASEAN-4 countries, thus giving new insights for policymakers to propose better policy recommendations on achieving sustainable growth.

ISSN 1511-3701

e-ISSN 2231-8542

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