The Nonlinear Links Between Urbanization And CO2: Evidence From Unconditional Quantile And Threshold Regression
Abstract The extant literature has provided empirical evidences about the relationship between urbanization and environment, however, a little attention has been paid to non-linear relationship among them. This study aims to measure the effects of urbanization on carbon dioxide emission using quantile and threshold regression method. To this end, the study employed threshold analysis and quantile regression method and analyzed the variation of such non-linearity for different levels of carbon dioxide using quantile regression. The results illustrate that a single threshold and two regimes exist and the threshold for urbanization is 29.56%. Across both regimes, the elasticity estimates form an inverted U-shape impact of urbanization on the carbon dioxide emission. The increase in the marginal effect of urbanization on carbon dioxide emissions up to the median level and a declining trend after this level implies that environmental quality significantly improves for emerging country.