Impact of Trade Liberalization and Corruption on Environmental Degradation in Pakistan

Fatima Zafar^1, , Sofia Anwar¹, Dr. Zakir Hussain¹ and Nisar Ahmad²

¹Department of Economics, Government College University Faisalabad, Faisalabad, Punjab, Pakistan

²Department of Economics, University of Sargodha, Sargodha, Punjab, Pakistan

Cite this paper:
Fatima Zafar, Sofia Anwar, Dr. Zakir Hussain and Nisar Ahmad. Impact of Trade Liberalization and Corruption on Environmental Degradation in Pakistan. Journal of Finance and Economics. 2013; 1(4):84-89. doi: 10.12691/jfe-1-4-4

Abstract

The present study revealed the impact of trade liberalization and corruption on environmental degradation. Yearly data were used from 1980 to 2011 for estimation. Air and water pollution were used as the environmental indicators. First model confirmed the evidence of the EKC. Trade liberalization and corruption index were used as the explanatory variables. Income per capita, square of income per capita, industrial value added, secondary school enrollment, law and order index and fertilizer use were used as control variables. Augmented Dickey Fuller (ADF) test was applied to check the stationarity level of each variable included in the model. Autoregressive Distributed Lag (ARDL) was applied to find empirical results. Some policies were suggested on the base of empirical findings.

Keywords:
Trade liberalization Corruption Environmental degradation

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