The Environmental Effects of Urbanization, Education, and Green Innovation in the Union for Mediterranean Countries: Evidence from Quantile Regression Model

Abstract

This study aims to examine the environmental dynamics in the Union for Mediterranean (UFM) countries by considering education, urbanization, green innovation, and other key factors for the period 2001–2016. The data are divided based on the income level of UFM countries and analyzed with panel quantile regression, panel unit root tests, panel co-integration test, ordinary least squares method, and fixed effects model to evaluate the nexus between variables. A generalized method of moments (GMM) is employed to deal with the endogeneity issue in the panel data. The results of the study confirm that the urban population has an inverted U-shaped association with environmental degradation in the lower-middle and high-middle income countries. It further comes out that increased education levels decrease environmental degradation in the high-income countries. Hence, green innovation reduces environmental degradation in the upper-middle-income and high-middle-income countries. The study validates an inverted U-shaped relationship between GDP and environmental degradation in all income-based groups of countries, which supports the Environmental Kuznets Curve (EKC) hypothesis.