International Economic Journal

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/riej20

Linking Industrialization and Environmental

Quality in Sub-Saharan Africa: Does the
Environmental Policy Stringency Matter?

Guivis Zeufack Nkemgha, Symphorien Engone Mve, Tekam Oumbé Honoré

& Alim Belek

To cite this article: Guivis Zeufack Nkemgha, Symphorien Engone Mve, Tekam Oumbé Honoré
& Alim Belek (25 Nov 2023): Linking Industrialization and Environmental Quality in Sub-Saharan
Africa: Does the Environmental Policy Stringency Matter?, International Economic Journal, DOI:
10.1080/10168737.2023.2286955

To link to this article: https://doi.org/10.1080/10168737.2023.2286955

Published online: 25 Nov 2023.

Submit your article to this journal

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=riej20
INTERNATIONAL ECONOMIC JOURNAL
https://doi.org/10.1080/10168737.2023.2286955

Linking Industrialization and Environmental Quality in

Sub-Saharan Africa: Does the Environmental Policy
Stringency Matter?
Guivis Zeufack Nkemghaa , Symphorien Engone Mveb , Tekam Oumbé Honoréc &
Alim Belekc
a Economic Department, University of Bamenda, Bamenda, Cameroon; b Economic Department, University of
Omar Bongo, Libreville, Gabon; c Economic Department, University of Dschang, Dschang, Cameroon

ABSTRACT ARTICLE HISTORY

This paper contributes to the literature on the relationship between Received 2 April 2023
industrialization and environmental quality. Despite an abundant lit- Revised 5 September 2023
erature on the subject, existing studies have not yet investigated Accepted 13 November 2023
the role of environmental policy stringency in the transmission of KEYWORDS
the effects of industrialization on environmental quality. This study Industrialization;
uses a panel of 24 countries in sub-Saharan Africa (SSA) with data environmental quality;
covering the period 2000–2020. The use of the system GMM method- environmental policy
ology shows that industrialization – measured by – the value added stringency; CO2 emissions;
of industry and the value added of manufacturing – significantly SSA
deteriorates the quality of the environment. However, the introduc-
tion of the environmental policy stringency variable as a transmis-
sion channel produces a detrimental effect of industrialization on
CO2 emissions up to thresholds of 37.33 and 37 respectively for the
industrial sector and the manufacturing sector. For an environmental
policy stringency above these thresholds, industrialization signifi-
cantly reduces CO2 emissions. Finally, we found the Environmental
Kuznets Curve between economic growth and CO2 emissions. Thus,
a strengthening of environmental policy can help these countries
to develop a virtuous relationship between industrialization and the
quality of the environment.

1. Introduction
For a century, the concentration of greenhouse gases has increased significantly and is
the main cause of global warming. The main component of greenhouse gases is carbon
dioxide which contributes nearly 82% of all greenhouse gas emissions to the atmosphere.
With the production and use of energy contributing 87% of total carbon dioxide emissions
generated by human activity, reducing the use of fossil fuels is at the center of concerns
for advocates of green initiatives. Fossil fuels (oil, coal, natural gas) produce carbon diox-
ide, methane and water vapor, all of which contribute to global warming (Pachauri et al.,
2014).

CONTACT Guivis Zeufack Nkemgha nkemghazeufackguivis@yahoo.fr Economic Department, University of

Bamenda, Bamenda, P.O. Box 39 Bambili, Cameroon

© 2023 Korea International Economic Association

2 G. Z. NKEMGHA ET AL.

The climate issue transcends national borders. Today, climate change is a global problem
and therefore a concern of the international community. Thus, Sustainable Development
Goal 13 aims to take urgent action to fight against climate change and its impacts. It is
intrinsically linked to the other 16 goals of the 2030 Agenda for Sustainable Development.
To fight against climate change, countries around the world adopted the Paris Agreement
at COP21 in Paris on 12 December 2015 to limit the increase in global temperature to less
than 2 degrees Celsius; in view of the serious risks, to endeavor to reach a maximum of
1.5 degrees Celsius.
Africa is not only the second most vulnerable region in the world to climate change; it
also has the lowest level of climate preparedness. For example, the climate vulnerability and
climate change preparedness indices show large variations from one country to another.
Data from 53 African countries show that all countries were vulnerable to climate change,
with Somalia, Niger, Guinea-Bissau, Chad and Sudan ranked among the most vulnerable to
climate shocks and South Africa, Angola, Morocco and Tunisia the least vulnerable (AfDB,
2022).
According to the AfDB (2022), the African population represents 17% of the world
population. In addition, this continent actually represents 3% of cumulative global green-
house gas emissions. These emissions are expected to increase over the coming decades
in the region, given the ongoing economic and institutional reforms aimed at increasing
economic growth, enhancing industrialization and economic diversification, improving
transport systems and responding to the energy crisis (Avom et al., 2020). However, this
continent has recorded 131 disasters linked to extreme weather conditions and climate
change between 2020 and 2021. These disasters have economic, social and environmental
consequences for its populations (AfDB, 2022),
Climate change has impacted Africa’s GDP. The continent is seeing its GDP cut between
5% and 15% due to climate change. The high warming scenario will have particularly severe
consequences for African economies. The reduction in GDP per capita growth in this sce-
nario is projected to values between 16% and 64% by 2030 (AfDB, 2022). Africa is not the
only continent that suffers losses caused by climate change, the other continents are no
exception to this rule. Because, according to the ‘2017 Lancet Commission on Pollution
and Health’, which used data from the 2015 Global Burden of Diseases, Injuries, and Risk
Factors Study (GBD), found that pollution was responsible for approximately 9 million
deaths (16% of all global deaths) and economic losses totaling US$ 4.6 trillion (6.2% of
global economic output) in 2015 (Landrigan et al., 2018).
Environmental degradation is often the effect of a multiplicity of individual actions but
generally harmful. Understanding the factors that cause this degradation is a necessary
prerequisite for any environmental policy. Among the potential causes of environmental
degradation, industrialization has always been questioned by several works (Ahmed et al.,
2022; Ali et al., 2021; Chigbo et al., 2016; Muhammad et al., 2020).
According to the World Bank (2020), the global industrialization trend shows that global
industrialization has increased rapidly from 11 billion (constant 2010 USD) in 1994 to
204 billion in 2014. Similarly, for high-income countries, industrialization increased from
92 billion in 1997 to 113 billion in 2014. In the case of upper middle-income coun-
tries, industrialization increased from 241 billion to 725 billion and from 60 billion to
169 billion for lower-middle-income countries over the same period. For low-income
countries, industrialization has increased from 63 million to 1 billion. These trends indicate
 INTERNATIONAL ECONOMIC JOURNAL 3

that industrial growth has been a growing phenomenon since the end of the twentieth
century.
However, this industrial growth is not without consequences for the quality of the
environment. Because, there is no doubt that industrialization is necessary for economic
growth, but at the same time, it is also the fact that it has a detrimental impact on the quality
of human life as well as on the environment. Rapid industrial growth has been examined
to affect the entire bio-network and components of a natural system such as air, water, soil
and the surrounding ecosystem (Ahmed et al., 2022; Magsi, 2014).
Advocates for Africa’s green industrialization are inspired by both the Sustainable
Development Goals (SDGs) adopted by world leaders in September 2015 and the Paris
Climate Agreement adopted in December 2015, who both support green initiatives. More-
over, the United Nations Economic Commission for Africa (ECA) mentioned in its 2016
economic report entitled ‘towards green industrialization in Africa’, that ‘green industri-
alization is the only possible path for Africa . . . It is a prerequisite for achieving sustainable
growth for all’.
From a global point of view, countries have always been slow to adopt green technolo-
gies ‘because of an ingrained belief that environmental norms threaten competitiveness’,
explains Porter (1991). According to this author, environmental pressures and green invest-
ments contribute to improve the competitiveness of companies as well as that of nations
where the regulations are the most stringent (Porter, 1991; Porter & Van Der Linde, 1995).
Indeed, the reduction of pollution tends to stimulate innovation, to reduce the quantities
of materials and energy used, and therefore to increase factors productivity.
Africa’s ability to ‘leapfrog’ (the fashionable term in economic forums) offers the con-
tinent a significant economic advantage. In other words, African countries implementing
green initiatives will not have to go through all the intermediate technological stages: they
will only need to directly access the latest innovation available on the market. We can
therefore expect Africa to make a real ‘leapfrog’, a development leap. As for the industrial-
ized countries, they will have to modernize their old infrastructures, which will represent
heavy expenses for them. In general, development experts on the African continent all
believe that a green, clean and ecological approach is no longer just a moral issue, but a
socio-economic imperative. For them, it is the new green path that Africa must take to
industrialize.
According to ecological modernization theory, there is a non-linear relationship
between industrialization and environmental quality. According to this theory, there is very
little industry in the early stages of globalization that contributes to environmental degra-
dation. With the introduction of modern alternative environmentally friendly technologies
on the one hand and on the other hand with greater public awareness on the quality of the
environment, these problems tend to decrease in the long term (Majeed & Mazhar, 2019).
In addition, the willingness to pay for a cleaner environment also increases.
Empirically, the literature on the relationship between industrialization and the envi-
ronment is classified into two groups. The first group highlights the damaging effect of
industrialization on the environment (Ahmed et al., 2022; Al-Mulali & Ozturk, 2015; Ali
et al., 2021; Hong et al., 2019; Li et al., 2019; Samreen & Majeed, 2020; Wang et al., 2011).
However, the second group reports the favorable environmental effect of industrializa-
tion (Congregado et al., 2016; Zhou et al., 2013). Thus, it appears that the analysis of the
relationship between industrialization and the environment remains very controversial.
4 G. Z. NKEMGHA ET AL.

These mixed results could partly be explained by the differences in the econometric
technique used, the period and the sample of countries in the study. Moreover, exist-
ing studies have ignored the role and importance of environmental policy severity in the
relationship between industrialization and environmental quality. It could, however, be
useful in identifying the channel through which policy makers could act to derive better
environmental outcomes from industrialization. To fill this gap, we investigate the effect
of industrialization on carbon emissions in Sub-Saharan Africa (SSA) focusing on the
role of environmental policy stringency. More specifically, our objective is to analyze the
role of environmental policy stringency in the relationship between industrialization and
environmental quality.
This study is relevant for at least three reasons. First, according to the AfDB (2022),
Africa is the second most vulnerable region in the world to climate change; it also has the
lowest level of climate preparedness. Second, countries in Africa have responded to global
calls for action on climate change with laudable policy frameworks as well as other auxiliary
agreements and pacts with measures to mitigate the impact of climate change (Appiah &
Johnson, 2017). Thus, understanding the explanatory factors of carbon emissions provides
an empirical basis for an effective fight against global warming. Third, unlike existing stud-
ies, in this work we highlight the role of environmental policy stringency in the relationship
between industrialization and environmental quality. Indeed, the enforcement of environ-
mental norms will have as a corollary the upgrading of industrial companies through the
development and/or use of green technologies which certainly increase production costs.
However, responding to these constraints also leads to innovation efforts to improve pro-
cesses, use inputs more efficiently and find new outlets for production by-products. Porter
(1991) finds that the benefits resulting from these measures in most cases ultimately exceed
their costs. In fact, the strengthening of regulatory constraints in some countries aims to
reduce the level of pollution on the one hand and on the other hand tends to improve the
competitive position of the least polluting firms on international markets.
After this introduction, the rest of the article is structured as follows. Section 2 briefly
highlights the literature review. Section 3 describes the econometric approach and the data.
Section 4 presents and discusses the empirical results. Conclusions and policy implications
are presented in Section 5.

2. Literature Review
At the introduction level, we have highlighted in a paragraph the ambiguous relationship
that exists between industrialization and the environmental quality through two groups of
authors. To avoid repeating ourselves in this section, we have chosen to highlight only the
basic works which constitute an attempt to answer the following question: can the enforce-
ment of environmental norms mitigate the environmental effect of industrialization? Two
antagonistic visions clash on this question: the classical approach and the Porter hypothesis.

2.1. The Classic Model Where the Environment is an Economic and Societal
Constraint
According to the classic approach on the relationship between economic and environ-
mental issues, ecological pressures appear as constraints and costs likely to threaten the
 INTERNATIONAL ECONOMIC JOURNAL 5

sustainability of organizations. The theory of negative externalities and abatement costs

forms the core of this perspective. According to the classic economic approach, the envi-
ronmental nuisances caused by industrial activity result in costs that are neither borne by
the company nor included in the price of its products: health problems, acceleration of
corrosion, loss of harvests, deterioration of a recreational or tourist site, depletion of nat-
ural resources. These costs are therefore externalized, i.e. transferred to the community.
Environmental pressures and regulatory norms will lead companies to internalize these
costs through actions aimed at reducing the impact on the natural environment. These
depollution actions will thus result in costs related in particular to the acquisition of envi-
ronmental equipment (air purifiers, filters, cleaner processes, etc.) and operating expenses
(labor, maintenance, maintenance, etc.). The reinforcement of these pressures is not only
likely to compromise the image of the company but also to considerably reduce its lee-
way due to regulatory constraints, public protests, media campaigns or boycott operations
organized by environmental groups (Ackerman & Bauer, 1976; Pasquero, 1980).
Unlike the classic economic approach, Porter’s hypothesis postulates that the environ-
ment, far from being an economic and social constraint, is at the service of productivity.

2.2. Porter’s Hypothesis or the Environment at the Service of Productivity

Based on a conflicting relationship between the economy and the environment, the clas-
sic model has been widely challenged since the end of the 1980s by different approaches
that have made efforts to demonstrate the benefits of integrating ecological concerns into
the business activity. These approaches have been widely popularized by the principle of
‘sustainable development’, which is at the center of the work of the World Commission on
Environment and Development (1988), which inspired many studies on the economic ben-
efits of environmental investments. Thus, contrary to the Malthusian proposals of the Club
of Rome,1 the sustainable development strategy maintains that the resumption of growth,
associated with a more equitable redistribution of wealth and respect for natural balances
is essential to ensure a sustainable mode of development, that is, development ‘that meets
the needs of the present without compromising the ability of future generations to meet
theirs’ (World Commission on Environment and Development, 1988). The Brundtland
Commission’s optimism about the possibilities of harmonizing economy and ecology will
facilitate efforts to take into account the strategy of sustainable development at interna-
tional, national, regional and even organizational levels. The proliferation of ‘green plans’,
which aims to integrate the environmental and economic policies of countries is part of
this philosophy. Thus, many countries such as Canada, Denmark, France, Great Britain,
Ireland, Italy, Norway or the Netherlands implemented, from the beginning of the 1990s,
plans more or less ambitious to promote a sustainable development strategy based on a
‘win-win’ logic (Theys, 1992).
Environmental issues appear most of the time as a way to improve the productivity
and competitiveness of the company. This ‘win-win’ perspective is often called ‘Porter’s
hypothesis’, the latter having been one of the first to question the traditional postulate of the

1 The concept of ‘zero growth’ proposed by the Club of Rome in the early 1970s proposed a halt in economic growth, consid-
ered largely responsible for major environmental imbalances. Based on complex calculations and forecasts, the analyzes
of the Club of Rome actually reflect, in their assumptions and conclusions, the basic postulates of the classical model on
the economy-environment relationship.
6 G. Z. NKEMGHA ET AL.

Table 1. Descriptive statistics.

Obs Mean SD Median Min Max
CO2 504 0.44 0.73 0.16 0.02 3.34
Value Added of industry 504 23.86 10.48 22.32 4.55 72.15
Urbanpop 504 34.48 14.10 35.99 8.24 70.17
Internet 504 7.83 10.58 3.52 0.005 58.59
Trade 504 71.74 33.70 64.3 20.72 209.89
Value Added of agriculture 504 24.68 13.53 25.10 1.82 58.65
Gross Domestic Product 504 4.69 4.28 4.91 −36.04 33.63
Environmental Performance Index 504 35.46 9.73 36.88 15.13 60.43
Source: Authors.

negative link between environmental actions and business competitiveness (Porter, 1991;
Porter & Van Der Linde, 1995). The questioning of this postulate does not bear directly on
the constraining nature of environmental pressures. According to Porter, the development
of environmental regulations, on the contrary, calls for expenditure and transformations
likely to increase costs. However, the response to these constraints also leads to innovation
efforts to improve processes, use inputs more efficiently and find new outlets for produc-
tion by-products. This author considers that the benefits resulting from these measures
ultimately exceed their costs. In fact, the strengthening of regulatory constraints in some
countries, far from slowing down the competitiveness of companies compared to com-
petitors that are not subject to the same norms, stimulates it and tends to improve the
competitive position of the least polluting firms on the international markets.
However, more systematic studies conducted since the early 1990s to verify Porter’s
hypothesis have often yielded contradictory results. This research has often been based on
analyzes of the correlation between the strengthening of regulatory norms in certain sec-
tors and the evolution of the level of productivity of companies. While some studies tend to
validate Porter’s hypothesis (Azzone & Bertèle, 1994; Lanoie & Tanguay, 1999), others, on
the contrary, confirm the main postulate of the classical model (Boyd & McCelland, 1999;
Palmer et al., 1995).
Contrary to existing works that have examined the relationship between the strength-
ening of environmental norms and the level of production of companies from the angle of
‘cost-benefit’ analysis, this study has the particularity of highlighting the role of environ-
mental policy stringency in the transmission of the environmental effect of industrializa-
tion.

3. Data and Methodology

3.1. Data
This study covers a panel of 24 countries in sub-Saharan Africa with data covering the
period 2000–2020 and which come from World Development Indicators (WDI) and Yale
University. The periodicity and the countries under the sample are chosen according to the
constraints of data availability. The complete description of the data is presented in Tables 1
and 2.
Table 1 summarizes the model variables through a few indicators. This table shows that
the average CO2 emissions (in metric tons per capita) is 0.44. In addition, the median CO2
emission rate is 0.16, which means that 50% of the countries in our sample individually
 INTERNATIONAL ECONOMIC JOURNAL 7

Table 2. Pairwise correlation matrix.

CO2 Industry Urbanpop Internet Trade Agriculture GDP
CO2 1.000
Industry 0.3387 1.000
Urbanpop 0.5572 0.5165 1.000
Internet 0.5900 0.0708 0.3412 1.000
Trade 0.4802 0.4531 0.3626 0.2344 1.000
Agriculture −0.6076 −0.6631 −0.5181 −0.4528 −0.5381 1.000
GDP −0.0633 0.0724 −0.0764 −0.0086 −0.0143 −0.0091 1.000
Source: Authors.

record a CO2 emission rate below 0.16 while the other 50% individually record an emis-
sion rate of CO2 greater than 0.16. By calculating the variation coefficient of CO2 which is
equal to the standard deviation divided by the mean (0.73 ÷ 0.44 = 1.65), we found that it
is greater than 0.3, which reflects the heterogeneous nature of CO2 emissions in SSA coun-
tries. As for the variable added value of industry, it has an average of 23.86% of GDP and a
median of 22.32 of GDP.
As for the correlation matrix, it is shown in Table 2. The analysis of this matrix
reveals three main information. The first observation is that the correlation coefficient
between the explanatory variables of the model is less than 80%, which demonstrates
that our model does not suffer from the multicollinearity issue according to the rule of
thumb (Young, 2018). The second information highlights the positive correlation between
industrialization and CO2 emissions. The latest information concerns the contribution of
industrialization to the variation in CO2 emissions. The relationship between the linear
correlation coefficient (ρxy ) and the determination coefficient (R2 ) is given by:
√
ρxy = R2 → R2 = ρxy
2
→ R2 = 0.33872 = 0.1147 = 11.47%

Therefore, the variation in CO2 emissions explained by industrialization is 11.47%.

Figure 1 shows that there is a positive correlation between industrialization and CO2
emissions. We can deduce that greater industrialization is associated with a high level of
CO2 emissions. This relationship confirms not only the correlation coefficient (Table 2), but
also the results found by the contemporary literature (Ahmed et al., 2022; Ali et al., 2021).
However, since correlation does not mean causation, this relationship will be investigated
empirically in the next section.
The dependent variable in this study is environmental quality. It is measured by the
CO2 emission rate (in metric tons per capita). This indicator of environmental quality has
been widely used in recent literature (Ahmed et al., 2022; Avom et al., 2020). Regarding
the independent variable of interest (industrialization), it is captured in this work by two
indicators: (i) value added of industry as a percentage of GDP and (ii) value added of the
manufacturing sector as a percentage of GDP. Value Added of the manufacturing sector
is used in this study for robustness purposes. These two indicators are increasingly used
in recent literature (Ahmed et al., 2022; Njagang & Nounamo, 2020; Nkemgha, Engone
Mve, et al., 2021). To reduce the bias that may result from possible omissions of variables,
five control variables are included in this study. They include (i) trade openness, (ii) eco-
nomic growth (iii) urbanization, (iv) internet and (v) value added of agriculture. A detailed
description of the variables as well as the definition of said variables are presented in the
8 G. Z. NKEMGHA ET AL.

Figure 1. Value added of industry and CO2 emissions.

Appendix. Before proceeding to the empirical analysis on the relationship between indus-
trialization and environmental quality, a brief description of the expected signs is given in
the paragraphs below.
Under STIRPAT framework, several studies have explored the effects of urbanization,
economic growth and industrialization on environmental degradation. In addition, an
extension of this model by Avom et al. (2020) shows, among others, that information
and communication technologies and trade openness are also explanatory factors for CO2
emissions.
The relationship between economic growth and the environment has already been
widely explored in the literature. To this end, the works of Majeed and Luni (2019) and
Avom et al. (2020) confirm the existence of the environmental Kuznets curve. However,
the work of Mills and Waite (2009) does not confirm this result. Like the environmen-
tal Kuznets curve, the pollution haven hypothesis has also been explored in the literature.
To this end, the work of Cole (2004) and Managi et al. (2009) showed that trade open-
ness leads to environmental degradation, thus validating the pollution hypothesis. As
for the relationship between urbanization and the environment, Li et al. (2019) found
that urbanization leads to environmental degradation. Along with urbanization, informa-
tion and communication technologies deteriorate the quality of the environment (Avom
et al., 2020). Regarding agriculture, Kombienou et al. (2020) demonstrated that it has a
detrimental effect on the environmental quality.

3.2. Methodology
The objective of this article is to study the impact of industrialization on the environ-
mental quality of the sub-Saharan African countries. According to recent literature on
 INTERNATIONAL ECONOMIC JOURNAL 9

environmental quality (Avom et al., 2020), we formulate the following model:

CO2it = β0 + β1 CO2it−1 + β2 Industryit + β3 Urbanpopit + β4 Internetit + β5 Tradeit

+ β6 Agricultureit + β7 Gdpit + β8 Gdp2it + ui + vt + eit (1)

where ui is the unobserved country-specific effect, vt is the time-specific effect, and eit is
the error term.
To take into account the role of the stringency of environmental policy (measured here
by the environmental performance index (EPI)) in the relationship between industrializa-
tion and environmental quality, we have defined the interaction variable Industry∗EPI that
has been added to model (1) to form the following model (2):

CO2it = β0 + β1 CO2it−1 + β2 Industryit + β3 Urbanpopit + β4 Internetit + β5 Tradeit

+ β6 Agricultureit + β7 Gdpit + β8 Gdp2it + β8 EPI + β9 Industry ∗ EPI
+ ui + vt + eit (2)

We use different specifications and estimation techniques to analyze the effect of industri-
alization on environmental quality. We first use the ordinary least squares (OLS) method
to estimate equation (1). However, the OLS model does not take country fixed effects into
account and may suffer from omitted variable bias. To deal with country fixed effects, we
then applied a fixed effects (FE) model. However, when the FE technique is used to esti-
mate this model, the estimated coefficients are inconsistent and susceptible to bias since
the lagged value of carbon dioxide (CO2it−1 ) is correlated with the error term (Nickell,
1981) raising the problem of endogeneity. To solve this problem of endogeneity, we apply
the System Generalized Method of Moments (GMM) proposed by Arellano and Bond
(1991), Arellano and Bover (1995) and Blundell and Bond (1998). This method is use-
ful for several advantages. First, the GMM estimator has been widely used to solve the
endogeneity problem that arises in the estimation of panel data (Arellano & Bover, 1995;
Blundell & Bond, 1998). Second, the GMM estimator also takes into account biases that
arise due to country-specific effects. Third, GMM also avoids simultaneity or reverse cau-
sation issue. The consistency of the GMM estimator depends on two tests: the validity of
the assumption that the error term has no serial correlation (AR (2)) and the validity of
the instrument (Hansen’s test). Too many instruments can seriously weaken and bias the
over-identification of restrictions Hansen test, and therefore the rule of thumb is that the
number of instruments should be less than the number of countries (Roodman, 2009). To
test the sensitivity of our results on a methodological level, we will use the PSTR method
developed by Gonzalez et al. (2005).

4. Results
The results of our estimates are presented in the various tables below. Table 3 presents the
results of the effect of industrialization on environmental quality using the OLS method.
Table 4 also presents the results of the basic model by the method of fixed effects. Table 5
reproduces the results of Table 4 by introducing the role of the stringency of environmen-
tal policy in the relationship between industrialization and environmental quality. As for
10 G. Z. NKEMGHA ET AL.

Table 3. Environmental effect of industrialization through the OLS method.

Dependent variable: CO2

1 2 3 4 5
Industry 0.0077∗∗∗ 0.0047∗∗∗ 0.0082∗∗∗ 0.0093∗∗∗ 0.0108∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Urbanpop 0.0685∗∗∗ 0.0626∗∗∗ 0.0648∗∗∗ 0.0638∗∗∗ 0.0616∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Internet 0.0111∗∗∗ 0.0123∗∗∗ 0.0130∗∗∗ 0.0132∗∗∗ 0.0134∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Trade 0.0054∗∗∗ 0.0055∗∗∗ 0.0056∗∗∗ 0.0054∗∗∗
(0.00) (0.00) (0.00) (0.00)
Agriculture 0.01155∗∗∗ 0.0110∗∗ 0.0088∗∗
(0.00) (0.03) (0.01)
Gdp −0.0052 −0.0042
(0.1) (0.1)
Gdp2 −0.0005∗∗∗
(0.00)
Cons 5.1231∗∗∗ 4.9990∗∗∗ 4.5445∗∗∗ 4.5802∗∗∗ 4.7008∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
R2 0.50 0.53 0.54 0.55 0.56
Prob (Chi2) 0.00 0.00 0.00 0.00 0.00
Obs 504 504 504 504 504
Countries 24 24 24 24 24
Note: ∗∗∗ and ∗∗ represent respectively the significance at 1 and 5%.
Sources: Authors through Stata 14 software. The values in the parentheses represent the probabilities of each
coefficient.

Table 6, it reproduces the results of Table 5, using the value added of the manufacturing
sector as an alternative measure of industrialization.

4.1. Baseline Results

Table 3 presents the basic results by the OLS method. The results clearly suggest that indus-
trialization increases CO2 emissions, which means that industrialization has a detrimental
effect on the environmental quality, ceteris paribus. For example, the results in column (5)
suggest that an increase in industry value added of one unit leads to an increase in CO2
emissions of 1.08%.
The use of the fixed effects method gives compatible results with those found by the OLS
method. The results of these estimations are recorded in Table 4.
The previous methods have established a detrimental effect of industrialization on CO2
emissions. However, the possibility of reverse causation, endogeneity, or unobserved het-
erogeneity may bias the results and call our findings into question. To deal with these
potential problems, we estimate Equations (1) and (2) by the System Generalized Method
of Moments. The results of this estimation are recorded in Table 5.

4.2. System GMM Regression

The analysis of the effect of industrialization on the quality of the environment by the
system GMM shows an absence of second-order autocorrelation at the 5% threshold and
the validity of the identification test of the instrument for all three columns. Overall, we
observe the positive association between industrialization and CO2 emissions in Table 5.
 INTERNATIONAL ECONOMIC JOURNAL 11

Table 4. Environmental effect of industrialization through the fixed effects method.

Dependent variable: CO2

1 2 3 4 5
Industry 0.0081∗∗∗ 0.0050∗∗∗ 0.0085∗∗∗ 0.0098∗∗∗ 0.0115∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Urbanpop 0.0718∗∗∗ 0.0655∗∗∗ 0.0675∗∗∗ 0.0670∗∗∗ 0.0659∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Internet 0.0103∗∗∗ 0.0115∗∗∗ 0.0123∗∗∗ 0.0123∗∗∗ 0.0122∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
Trade 0.0056∗∗∗ 0.0056∗∗∗ 0.0058∗∗∗ 0.0058∗∗∗
(0.00) (0.00) (0.00) (0.00)
Agriculture 0.0118∗∗∗ 0.0114∗∗∗ 0.0091∗∗
(0.00) (0.00) (0.01)
Gdp −0.0056∗ −0.0048
(0.07) (0.1)
Gdp2 −0.0005∗∗∗
(0.00)
Cons 5.0056∗∗∗ 4.8801∗∗∗ 4.4294∗∗∗ 4.4410∗∗∗ 4.5114∗∗∗
(0.00) (0.00) (0.00) (0.00) (0.00)
R2 0.50 0.53 0.54 0.55 0.56
Prob (F-stat) 0.00 0.00 0.00 0.00 0.00
Obs 504 504 504 504 504
Countries 24 24 24 24 24
Note: ∗∗∗ , ∗∗ and ∗ respectively represent the significance at 1%, 5% and 10%.
Sources: Authors through Stata 14 software. The values in the parentheses represent the probabilities of each
coefficient.

Column (1) of Table 5 shows that industrialization deteriorates the environmental qual-
ity. Thus, an increase in the value added of industry by one unit leads to an increase in CO2
emissions of 0.23% (column 1). This result can be explained by the fact that most industries
still rely on old technologies to produce their goods, the aim being to reduce production
costs as much as possible. Therefore, the use of old technologies leads to an increase in
the level of pollution. In addition, the absence of effective environmental policies and the
unwillingness to apply norms have allowed many industries to circumvent the laws pub-
lished by the various governments. This has led to an increase in the rate of CO2 emissions.
This result is compatible with the work of Li et al. (2019); Ali et al. (2021) and Ahmed et al.
(2022).
With regard to urbanization, it harms the quality of the environment by increasing CO2
emissions. Thus, an increase in urbanization by one unit leads to an increase in CO2 emis-
sions of 0.19% (column 1). This result can be explained by economically irresponsible
lifestyles in urban areas that increase CO2 emissions and degrade the natural ecosystem.
This result is compatible with the work of Li et al. (2019).
Unlike urbanization, trade openness preserves the quality of the environment. Thus,
an increase in trade openness of one unit leads to an increase in CO2 emissions of 0.03%
(column 3). This result is consistent with the work of Cole (2004) whose results validated
the existence of the pollution haven hypothesis.
As for agriculture, it significantly harms the quality of the environment. Thus, an
increase in the value added of the agricultural sector by one unit leads to an increase in CO2
emissions of 0.17% (Column 3). According to Kombienou et al. (2020), this result can be
explained by the fact that the use of chemical fertilizers, deforestation and vegetation fires
12 G. Z. NKEMGHA ET AL.

Table 5. Environmental effect of industrialization through the

system GMM.
Dependent variable: CO2

1 2 3
Industry 0.0023∗∗∗ 0.0024∗∗ 0.0224∗∗∗
(0.00) (0.02) (0.00)
Urbanpop 0.0019∗∗∗ 0.001∗∗ 0.0023
(0.00) (0.04) (0.1)
Internet 0.0006 0.0003 −0.0011
(0.1) (0.4) (0.3)
Trade −0.0002∗∗ −0.0003∗∗∗ 0.0003∗∗∗
(0.01) (0.00) (0.00)
Agriculture 0.0018∗∗∗ 0.0009 0.0017∗∗
(0.00) (0.1) (0.03)
Gdp 0.0084∗∗∗ 0.0102∗∗∗ 0.0090∗∗∗
(0.00) (0.00) (0.00)
Gdp2 −0.0004∗∗∗ −0.0005∗∗∗ −0.0001∗∗
(0.00) (0.00) (0.02)
EPI −0.0003 0.0130∗∗∗
(0.3) (0.00)
Industry∗EPI −0.0006∗∗∗
(0.00)
Lag Dep 0.9784∗∗∗ 0.9722∗∗∗ 1.0098∗∗∗
(0.00) (0.00) (0.00)
Cons 0.0455∗ 0.1471∗∗ −0.6646∗∗
(0.08) (0.01) (0.00)
Net effect (+/–) – – +0.0011
Threshold – – 37.3333
AR(1) 0.00 0.00 0.00
AR(2) 0.75 0.6 0.61
Sargan 0.30 0.06 0.26
Hansen 0.41 0.43 0.24
Prob(Chi2) 0.00 0.00 0.00
Instruments 23 23 23
Nb Obs 480 480 480
Note: ∗∗∗ , ∗∗ and ∗ respectively represent the significance at 1%, 5% and 10%.
Source: Authors through Stata 14 software. The values in the parentheses
represent the probabilities of each coefficient.

improve agricultural yields on the one hand and on the other hand deteriorate the quality
of the environment by increasing CO2 emissions.
Finally, economic growth is a factor in the deterioration of the quality of the environ-
ment. Thus, an increase in the gross domestic product of one unit leads to an increase in
CO2 emissions of 0.9% (column 3). Moreover, the gross domestic product squared variable
has a negative and significant effect on CO2 emissions. This result validates the existence
of the environmental Kuznets curve. This result is compatible with the work of Avom et al.
(2020).
Given that we have highlighted the argument that environmental degradation caused
by industrialization can be justified by the lack of enforcement of environmental laws,
enforcement of environmental norms may have the corollary the upgrading of industrial
companies through the development and or use of green technologies which significantly
reduce the level of pollution on the one hand and on the other hand improve their produc-
tivity. Moreover, Porter (1991) estimates that the benefits resulting from these measures
ultimately exceed their costs. It is in this perspective that we seek to analyze the role of the
 INTERNATIONAL ECONOMIC JOURNAL 13

Table 6. Environmental effect of the manufacturing sector

through the system GMM.
Dependent variable: CO2

1 2 3
Manufacturing 0.0023∗∗ 0.0041∗∗ 0.0148∗∗
(0.02) (0.02) (0.04)
Urbanpop 0.0025∗∗ 0.0005 0.0043∗∗∗
(0.04) (0.6) (0.00)
Internet −0.0007 −0.0011∗∗ −0.0006
(0.2) (0.02) (0.3)
Trade 0.004∗∗ 0.0005∗∗∗ 0.0009∗∗∗
(0.04) (0.00) (0.00)
Agriculture 0.0032∗∗∗ 0.0023∗∗ 0.0041∗∗∗
(0.00) (0.02) (0.00)
Gdp 0.00230∗∗∗ 0.0229∗∗∗ 0.0149∗∗∗
(0.00) (0.00) (0.00)
Gdp2 −0.0001∗ −0.0001∗∗ −0.0002∗∗∗
(0.06) (0.04) (0.00)
EPI −0.0029∗∗ 0.0052∗
(0.02) (0.06)
Manufacture∗EPI −0.0004∗
(0.08)
Lag Dep 1.0408∗∗∗ 1.0639∗∗∗ 0.9851∗∗∗
(0.00) (0.00) (0.00)
Cons −0.5948∗∗∗ −0.5909∗∗∗ −0.3828∗∗
(0.00) (0.00) (0.03)
Net effect (+/–) – – +0.0006
Threshold – – 37.00
AR(1) 0.00 0.00 0.00
AR(2) 0.93 0.94 0.83
Sargan 0.75 0.84 0.16
Hansen 0.77 0.65 0.46
Prob (Chi2) 0.00 0.00 0.00
Instruments 23 23 23
Nb Obs 480 480 480
Note: ∗∗∗ , ∗∗ and ∗ respectively represent the significance at 1%, 5% and 10%.
Source: Authors through Stata 14 software. The values in the parentheses
represent the probabilities of each coefficient.

severity of environmental policy in the relationship between industrialization and environ-

mental quality. To this end, we used the environmental performance index as a proxy for
the severity of environmental policy. Because this indicator is the result of the severity of the
environmental policies implemented by a country. The environmental performance index
(EPI) measures the performance of a country from an ecological point of view. Like the
GDP in economics, the EPI gives a general idea of the environmental actions of a country.
Each country receives a score between 0 and 100, with 100 being the best score, according
to different criteria and statistics.
To achieve this objective, we have defined an interaction variable between industrial-
ization and the environmental performance index: Industry∗EPI. The estimation of the
econometric model (2) gives results which are recorded in column (3) of Table 5.
Column (3) of Table 5 mainly shows that industrialization degrades the quality of the
environment on the one hand and on the other hand validates the existence of the envi-
ronmental Kuznets curve. As for the Industry∗EPI interaction variable, it has a negative
and significant effect on CO2 emissions. This means that the severity of environmental
14 G. Z. NKEMGHA ET AL.

policy plays an important role in transmitting the effects of industrialization on environ-

mental quality. The results of column (3) show that the variable Industry has a positive
and significant coefficient while the sign of the variable Industry∗EPI is negative and sig-
nificant. Consequently, the sign of the interactive effect is different from that of the direct
effect. Net effect is thus needed in accordance with contemporary literature (Asongu &
Nchofoung, 2021; Asongu & Nwachukwu, 2017). In the computation process, the net
effects of the effect EPI in interaction with Industry is +0.0011. This value is gotten as
(0.0224+ (−0.0006∗35.46)). In this computation, 0.0224 is the direct effect coefficient,
−0.0006 is the interaction coefficient, and 35.46 is the mean value of EPI reported in
the descriptive statistics table. It appears that despite the negative interaction effect of the
severity of environmental policy in the transmission of the effect of industrialization on
CO2 emissions, the positive direct effect overtakes the negative effect of the interaction
producing positive net effect of industrialization on CO2 emissions in our sample.
The threshold of the environmental policy severity variable that nullify the detrimen-
tal effect of industrialization on CO2 emissions in our sample is 37.3333. This threshold
value is obtained as the ratio of the unconditional effect to that of the conditional effect (by
setting the partial derivative of environmental quality with respect to industrialization to
zero). This threshold value has an important political implication because it is included
in the range of values reported in the descriptive statistics (15.13 < 37.3333 < 60.43).
This means that for an environmental performance index below 37.3333, industrialization
harms the quality of the environment. On the other hand, if the EPI is higher than 37.3333,
industrialization preserves the quality of the environment by reducing CO2 emissions.

4.3. Robustness Checks

To test the sensitivity of our results, we used an alternative measure of industrialization:
value added of manufacturing to GDP. This variable is widely used in recent literature
(Ahmed et al., 2022; Nkemgha, Kengne, et al., 2021). The results of this analysis are
recorded in Table 6. Moreover, we performed the PSTR analysis in order to improve this
work. The results of the PSTR analysis are recorded in Table 7.
Table 6 reproduces the analyses of Table 5 using the value added of the manufactur-
ing sector as an alternative measure of industrialization. Four main results can be drawn
from this table: (i) industrialization harms the quality of the environment, (ii) The envi-
ronmental Kuznets curve is verified between economic growth and CO2 emissions, (iii)
The positive direct effect overtakes the negative indirect effect producing a positive net
effect (0.0006) of the manufacturing sector on CO2 emissions in our sample, and (iv) The
threshold of the environmental policy stringency variable that nullify the positive effect of
the manufacturing sector on CO2 emissions in our sample is 37. This means that for an
environmental performance index below 37, the value added of the manufacturing sector
harms the environmental quality. On the other hand, if the EPI is above this threshold (37),
the value added of the manufacturing sector preserves the quality of the environment by
reducing CO2 emissions.
In view of the above, we can conclude that using the value added of the manufacturing
sector as a proxy for industrialization gives us robust results.
Table 7 presents the effect of industrialization on environmental quality using the envi-
ronmental performance index as a transition variable. The use of the PSTR method makes
 INTERNATIONAL ECONOMIC JOURNAL 15

Table 7. Environmental impact of industrialization

through the PSTR method.
Before the threshold Beyond the threshold
Industry 0.0009∗∗∗ −0.0050∗∗∗
(0.0003) (0.0005)
Urbanpop 0.0007 −0.0062
(0.0021) (0.0044)
Internet 0.0037∗∗∗ 0.0145∗∗∗
(0.0006) (0.0024)
Trade 0.0006∗∗ 0.0087∗∗∗
(0.0003) (0.0029)
Agriculture 0.0022∗∗ −0.0028∗∗
(0.0009) (0.0014)
GDP 0.0001 0.0014
(0.0007) (0.0180)
GDP2 −7.39 e-06 −0.0052∗∗∗
(2.42e-05) (0.0018)
R 1
Threshold 47.72
Gamma 386.6936
LM test 0.00
LMF test 0.00
LRT test 0.00
Countries 24
Note: ∗∗∗ , ∗∗ and ∗ respectively represent the significance at 1%, 5%
and 10%.
Source: Authors through Mathlab. The values in the parentheses
represent the corrected standard errors of each coefficient.

it possible to confirm the existence of the non-linear relationship between industrializa-

tion and environmental quality through the environmental performance index (because,
the p-value of the LM, LMF and LRT tests are all below the 1% threshold). This result estab-
lishes that the environmental performance index threshold below which industrialization
degrades environmental quality is 47.72. Beyond this threshold, industrialization promotes
environmental quality. Thus, the results in Table 7 are compatible with those in Table 5.

5. Conclusion and Policy Implications

Despite an abundant literature on the relationship between industrialization and environ-
mental quality, existing studies have not yet analyzed the role of the severity of environ-
mental policy in the transmission of the effects of industrialization on the environmental
quality. However, the application of environmental norms can force industrial companies
to develop green technologies in favor of industries. It is through this idea that we have ana-
lyzed the role that the severity of environmental policy can play on the relationship between
industrialization and the quality of the environment in 24 countries of sub-Saharan Africa
during the period 2000–2020. The empirical analyzes are based on the System Generalized
method of moments. In summary, the results revealed that industrialization – measured by
value added of industry and value added of manufacturing – significantly harms environ-
mental quality. In addition, the introduction of the environmental policy severity variable
allowed us to see that it is a potential channel through which Sub-Saharan African countries
can develop green industrialization. Finally, we found the environmental Kuznets curve
between economic growth and CO2 emissions.
16 G. Z. NKEMGHA ET AL.

The results reveal that for an environmental performance index above thresholds of
37.33 and 37 respectively for the industrial sector and the manufacturing sector, industri-
alization preserves the quality of the environment by significantly reducing CO2 emissions.
Thus, strengthening environmental norms can help these countries develop a virtuous rela-
tionship between industrialization and environmental quality. In addition, governments
could promote the development of green solutions by reducing constraints on the cost of
financing environmentally friendly technologies and projects. These incentives should take
the form of green subsidies for technology development and/or adoption. Finally, cam-
paigns to increase public awareness of the environmental benefits and costs associated with
industrialization in SSA could be promoted.
This study has some limitations. CO2 does not fully reflect environmental quality.
Because there are other pollutants that are generated by industrialization. Moreover, the
recommendations are limited to the regional level and do not take into account the speci-
ficities of each country. It is therefore important to extend this study to the national level to
better understand the impact of these policies. Finally, severity of environmental policy is
far from being the only transmission channel through which industrialization impacts the
quality of the environment. Thus, future studies could seek other transmission channels
through which industrialization impacts the quality of the environment by highlighting
several pollutants.

Disclosure statement
No potential conflict of interest was reported by the author(s).

References
Ackerman, R. W., & Bauer, R. A. (1976). Corporate social responsiveness: The modern dilemma.
Reston Publishing Company.
AfDB. (2022). Fostering climate resilience and a just energy transition in Africa. https://www.afdb.org/
fr/documents-publications/perspectives-economiques-en-afrique
Ahmed, F., Ali, I., & Ahmed, S. (2022). The environmental impact of industrialization and for-
eign direct investment: Empirical evidence from Asia-Pacific region. Environmental Science and
Pollution Research, 29(20), 29778–29792. https://doi.org/10.1007/s11356-021-17560-w
Ali, K., Bakhsh, S., Ullah, S., Ullah, A., & Ullah, S. (2021). Industrial growth and CO2 emissions
in Vietnam: The key role of financial development and fossil fuel consumption. Environmental
Science and Pollution Research, 28(6), 7515–7527. https://doi.org/10.1007/s11356-020-10996-6
Al-Mulali, U., & Ozturk, I. (2015). The effect of energy consumption, urbanization, trade openness,
industrial output, and the political stability on the environmental degradation in the MENA (Mid-
dle East and North African) region. Energy, 84, 382–389. https://doi.org/10.1016/j.energy.2015.
03.004
Appiah, D. O., & Johnson, K. (2017, November). Climate policy ambivalence in sub-Saharan Africa?
Climate policy ambivalence in sub-Saharan Africa (ICCG Reflection No.60).
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence
and an application to employment equation. The Review of Economic Studies, 58(2), 277–297.
https://doi.org/10.2307/2297968
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-
components models. Journal of Econometrics, 68(1), 29–51. https://doi.org/10.1016/0304-4076
(94)01642-D
Asongu, S., & Nchofoung, T. (2021). The terrorism-finance nexus contingent on globalisation and
governance dynamics in Africa (European Xtramile Centre of African Studies WP/21/016).
 INTERNATIONAL ECONOMIC JOURNAL 17

Asongu, S. A., & Nwachukwu, J. C. (2017). Foreign aid and inclusive development: Updated evidence
from Africa, 2005–2012. Social Science Quarterly, 98(1), 282–298. https://doi.org/10.1111/ssqu.
12275
Avom, D., Nkengfack, H., Fotio, H. K., & Totouom, A. (2020). ICT and environmental quality in sub-
Saharan Africa: Effects and transmission channels. Technological Forecasting and Social Change,
155, Article 120028. https://doi.org/10.1016/j.techfore.2020.120028
Azzone, G., & Bertèle, U. (1994). Exploring green strategies for competitive advantage. Long Range
Planning, 27(6), 69–81. https://doi.org/10.1016/0024-6301(94)90165-1
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel
data models. Journal of Econometrics, 87(1), 115–143. https://doi.org/10.1016/S0304-4076(98)
00009-8
Boyd, G., & McCelland, J. D. (1999). The impact of environmental constraints on productivity
improvement in integrated paper plants. Journal of Environmental Economics and Management,
38(2), 121–142. https://doi.org/10.1006/jeem.1999.1082
Chigbo, A. M., Chidozie, C. N., & Chekwubechukwu, N. (2016). Industrialization and its backlash:
Focus on climate change and its consequences. Journal of Environmental Science and Technology,
9(4), 301–316. https://doi.org/10.3923/jest.2016.301.316
Cole, M. A. (2004). Trade, the pollution haven hypothesis and the environmental Kuznets curve:
Examining the linkages. Ecological Economics, 48(1), 71–81. https://doi.org/10.1016/j.ecolecon.
2003.09.007
Congregado, E., Feria-Gallardo, J., Golpe, A. A., & Iglesias, J. (2016). The environmental Kuznets
curve and CO2 emissions in the USA. Environmental Science and Pollution Research, 23(18),
18407–18420. https://doi.org/10.1007/s11356-016-6982-9
Gonzalez, A., Terasvirta, T., & van Dijk, D. (2005). Panel smooth transition regression models
(Research Paper No. 165). Quantitative Finance Research Centre, University of Technology,
Sydney.
Hong, S., Lee, Y., Yoon, S. J., Lee, J., Kang, S., Won, E. J., & Shin, K. H. (2019). Car-
bon and nitrogen stable isotope signatures linked to anthropogenic toxic substances pollu-
tion in a highly industrialized area of South Korea. Marine Pollution Bulletin, 144, 152–159.
https://doi.org/10.1016/j.marpolbul.2019.05.006
Kombienou, P., Toko, I., Dagbenonbakin, G., Mensah, G., & Sinsin, B. (2020). Impacts socio-
environnementaux des activités agricoles en zone de montagnes au Nord-Ouest de l’Atacora au
Bénin. Journal of Applied Biosciences, 145, 14914–14929. https://doi.org/10.35759/JABs.145.7
Landrigan, P. J., Fuller, R., Acosta, N. J. R., Adeyi, O., Arnold, R., Basu, N., Baldé, A. B.,
Bertollini, R., Bose-O’Reilly, S., Boufford, J. I., Breysse, P. N., Chiles, T., Mahidol, C., Coll-
Seck, A. M., Cropper, M. L., Fobil, J., Fuster, V., Greenstone, M., Haines, A., . . . Zhong, M.
(2018). The Lancet Commission on pollution and health. The Lancet, 391(10119), 462–512.
https://doi.org/10.1016/S0140-6736(17)32345-0
Lanoie, P., & Tanguay, G. A. (1999). Dix exemples de rentabilité financière liés à une saine gestion
environnementale. Revue Gestion, printemps, p. 30–38.
Li, M., Li, L., & Strielkowski, W. (2019). The impact of urbanization and industrialization on energy
security: A case study of China. Energies, 12(11), 1–22.
Magsi, H. (2014). Industrialization, environment and pollution. The Diplomatic Insight, 7(2014),
24–36.
Majeed, M. T., & Luni, T. (2019). Renewable energy, water, and environmental degradation: A global
panel data approach. Pakistan Journal of Commerce and Social Sciences, 13(3), 749–778.
Majeed, M. T., & Mazhar, M. (2019). Environmental degradation and output volatility: A global
perspective. Pakistan Journal of Commerce and Social Sciences, 13(1), 180–208.
Managi, S., Hibiki, A., & Tsurumi, T. (2009). Does trade openness improve environmental quality?
Journal of Environmental Economics and Management, 58(3), 346–363. https://doi.org/10.1016/j.
jeem.2009.04.008
Mills, J. H., & Waite, T. A. (2009). Economic prosperity, biodiversity conservation, and the envi-
ronmental Kuznets curve. Ecological Economics, 68(7), 2087–2095. https://doi.org/10.1016/j.ecole
con.2009.01.017
18 G. Z. NKEMGHA ET AL.

Muhammad, S., Long, X., Salman, M., & Dauda, L. (2020). Effect of urbanization and international
trade on CO2 emissions across 65 belt and road initiative countries. Energy, 196, 117102.
Nickell, S. (1981). Biases in dynamic models with fixed effects. Econometrica: Journal of the Econo-
metric Society, 49(6), 1417–1426. https://doi.org/10.2307/1911408
Njagang, H., & Nounamo, Y. (2020). Is information and communication technology a driver of
industrialization process in African countries? Economics Bulletin, 40(4), 2654–2662.
Nkemgha, G., Engone Mve, S., Balouki Mikala, H., & Tékam, H. (2021). Linking natural resource
dependence and industrialization in sub-Saharan African countries. International Review of
Applied Economics. https://doi.org/10.1080/02692171.2021.1957786
Nkemgha, G., Kengne, V., & Djouaka, A. P. (2021). Does the exploitation of natural resources
promote the industrialization of African countries? Economics Bulletin, 41(3), 1338–1356.
Pachauri, R. K., Allen, M. R., Barros, V. R., Broome, J, Cramer, W., Christ, R., & van Ypserle, J. P.
(2014). Climate change 2014: synthesis report. Contribution of Working Groups I, II and III to the
fifth assessment report of the Intergovernmental Panel on Climate Change (pp. 151). Ipcc.
Palmer, K., Oates, W. E., & Portney, P. R. (1995). Tightening environmental standards: the benefit-
cost or the no-cost paradigm?. Journal of economic perspectives, 9(4), 119–132.
Pasquero, J. (1980). L’entreprise face aux pressions sociopolitiques de son environnement [thèse de
doctorat, Université des Sciences Sociales de Grenoble, Institut d’Administration des Entreprises].
CERAG. pascal-francis.inist.fr.
Porter, M. E. (1991). America’s green strategy. Scientific American, 264(4), 168. https://doi.org/10.
1038/scientificamerican0491-168
Porter, M. E., & Van Der Linde, C. (1995, septembre–octobre). Green and competitive: Ending the
stalemate, Harvard Business Review, 120–134.
Roodman, D. (2009). How to do xtabond2: An introduction to difference and system GMM
in Stata. The Stata Journal: Promoting Communications on Statistics and Stata, 9(1), 86–136.
https://doi.org/10.1177/1536867X0900900106
Samreen, I., & Majeed, M. T. (2020). Spatial econometric model of the spillover effects of financial
development on carbon emissions: A global analysis. Pakistan Journal of Commerce and Social
Sciences, 14(2), 569–202.
Theys, J. (1992, juillet-août). Environnement: le retour de la planification? Annales des Mines, 67–71.
Wang, Z., Shi, C., Li, Q., & Wang, G. (2011). Impact of heavy industrialization on the carbon emis-
sions: An empirical study of China. Energy Procedia, 5(3), 2610–2616. https://doi.org/10.1016/j.
egypro.2011.03.324
World Bank. (2020). World development indicators. Retrieved April 9, 2020, from http://data.world
bank.org/products/wdi
World Commission on Environment and Development. (1988). Our common future. Ed Fleuve.
Young, D. S. (2018). Handbook of regression methods. CRC Press.
Zhou, X., Zhang, J., & Li, J. (2013). Industrial structural transformation and carbon dioxide emissions
in China. Energy Policy, 57, 43–51. https://doi.org/10.1016/j.enpol.2012.07.017

Appendix

Table A1. List of panel countries.

Burundi Cote d’Ivoire Malawi Togo
Botswana DRC Central African Republic Mali
Burkina Faso Mauritius Chad Mozambique
Congo Rwanda Uganda Lesotho
Cameroon Madagascar Senegal Niger
Sierra Leone Nigeria Zambia Tanzania
Source: Authors.
 INTERNATIONAL ECONOMIC JOURNAL 19

Table A2. Variable definitions.

Variables Signs Variables definition (measurement) Sources
Manufacturing Manuf Manufacturing, value added World Bank (WDI)
(% of GDP)
Industry Industry Industry, value added (%GDP) World Bank (WDI)
Trade Openness Trade Total imports and exports over World Bank (WDI)
GDP(USA dollar)
Urbanization Urbanpop Population in urban agglomer- World Bank (WDI)
ations of more than 1 million
(% of total population)
Gross Domestic Product GDP Gross Domestic Product (GDP) World Bank (WDI)
(annual %)
Environmental Performance EPI the performance of a country Yale Center for Environmental
Index from an ecological point of Law & Policy, Yale University
view
Agriculture Agriculture Added value of agriculture (% World Bank (WDI)
of GDP)
Environmental quality CO2 CO2 emissions (in metric tons World Bank (WDI)
per capita)
ICT Internet The number of Internet users World Bank (WDI)
per 100 inhabitants
Source: Authors