Asymmetric Association Between Trade Uncertainty and Environmental Quality: Evidence From Newly Industrialized Economies

Abstract

The world has experienced a considerable increase in trade uncertainty (TUN) during the last several decades, with environmental and economic consequences. However, the prior research on the nexus between TUN and the environmental quality (ENQ) records contradictory results, which may be inconvenient when recommending environmental protection policies. The goal of this research was to look into the asymmetric link between TUN and ENQ in the selected newly industrialized economies. Previous studies utilized panel data methods, yielding similar conclusions about the linkage between TUN and ENQ, regardless of the truth that many economies did not develop such interconnectednhess individually. On the other hand, the current work employs a distinctive methodology, “quantile-on-quantile,” that allows researchers to analyze time-series dependency in every nation by providing universal yet economy-specific details on the association between the variables. As per estimates, TUN boosts ENQ in majority of our selected nations. Moreover, the results reveal that the degree of asymmetries amidst the variables differs by nation, highlighting the requirement for policymakers to pay particular attention while implementing trade and environment sustainability policies.