Rector’s Office, Hacettepe University, Ankara, 06800, Türkiye
Abstract
In the fight against global warming and climate change, understanding the trade-environment nexus has become a critical priority. This study aims to test the Environmental Kuznets Curve (EKC) hypothesis driven by foreign trade using panel data covering the period 1994–2023 in Argentina, Brazil, Ecuador, Colombia, and Mexico, the five largest economies in Latin America. The model uses total carbon dioxide (CO2) emissions as the dependent variable and per capita income, foreign trade and the square of foreign trade, renewable energy consumption, and worker remittances as independent variables. Cross-sectional dependence tests and slope heterogeneity tests were applied, followed by CIPS and CADF panel unit root tests, Westerlund panel cointegration test, CS-ARDL, and AMG estimators. CS-ARDL results revealed that while the foreign trade variables had the expected signs, they were not statistically significant in the long term. However, the analysis performed with the AMG estimator statistically supported the foreign trade-driven EKC hypothesis, revealing country-specific differences based on the turning point calculation. Furthermore, while renewable energy consumption and worker remittances significantly reduce CO2 emissions, per capita income increases emissions. It is recommended that policymakers aim to rapidly exceed the environmental improvement threshold of foreign trade by directing renewable energy and worker remittances towards low-carbon development.
Keywords
AMG,CS-ARDL,environmental Kuznets curve,workers’ remittances,Latin America
How to Cite
Ozarslan, A. (2026). Trade-induced environmental Kuznets Curve hypothesis in Latin America: Panel data analysis with CS-ARDL and AMG estimators. International Journal of Eurasia Social Sciences, 17(65), 1219–1232. https://doi.org/10.70736/ijoess.2369
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