ASYMMETRIC RELATIONSHIP BETWEEN ENVIRONMENTAL PROTECTION EXPENDITURES AND ECONOMIC GROWTH: PANEL CAUSALITY FINDINGS FROM SELECTED OECD COUNTRIES

Abstract

In this study, the causality relationship between environmental protection expenditures and economic growth is investigated for 13 selected OECD countries using the annual data set covering the period 1995-2019. First of all, the unit root test of the variables was carried out. The symmetric relationship for series found to be stationary at level values was investigated by Kónya (2006) bootstrap panel causality test. The asymmetrical relationship was carried out with the test applied by Yılancı and Aydın (2017) based on the tests of Granger and Yoon (2002) and Kónya (2006). According to the results of symmetric causality, a bidirectional relationship was found for Slovenia. A one-way relationship was found from environmental protection expenditures to the economic growth variable for Spain and Switzerland, and from the economic growth variable to environmental protection expenditures for Austria. It is seen that there are hidden relations for the Netherlands and Spain from the economic growth variable to the environmental protection expenditures for positive shocks, for France and Norway from the environmental protection expenditures to the economic growth variable for the negative shocks, and for the Czech Republic and Denmark from the economic growth variable to the environmental protection expenditures for the negative shocks