Effects of Environmental Pollution and Trade Development on Economic Growth

Our research examines how trade development and environmental pollution affect the economic growth of developing countries. To clarify this relationship, we use five-panel data estimation techniques, including Pooled-OLS, REM, FEM, Driscoll-Kraay, and GMM. Data were collected from 49 developing countries over the period 2005–2022. These findings indicate that trade openness and growth are positively correlated. More robust trade openness will lead to higher economic growth rates in countries. On the other hand, the inverted U-shaped relationship between environmental pollution and economic growth supports the Kuznest curve hypothesis in this study. Because environmental pollution is a severe problem in developing countries, the research results provide helpful information for policymakers in these countries to improve the quality of economic growth in the current trend direction of deep integration.