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Agriculture in the Baltic States; An Empirical Investigation of the Environmental – Economic Performance Relationship

D. Gkika, E. Zafeiriou

Abstract



The entrance of the Baltic countries in European Union within the last decade has been the cornerstone for the limitation of the greenhouse gas emissions. For the sector of agriculture one of the most significant for the Baltic states the greening CAP policies implemented were aiming to limit the greenhouse gas emissions without reducing the agricultural income. The present work studies economic - environmental performance relationship for the Baltic countries (Latvia, Lithuania, Estonia) and for the sector of agriculture. The data employed refer to the last two decades and were derived by FAOSTAT. The ARDL bounds cointegration test was employed for their analysis given that it can be applied to variables with different order of integration. According to our findings, cointegration is validated for all the countries studied but not the EKC hypothesis. To be more specific, the EKC hypothesis is invalid in the long run for all the three countries, while in the short run the ECK hypothesis is confirmed only for Latvia and Estonia.

Keywords


Baltic States, EKC hypothesis, ARDL cointegration, agricultural income, greenhouse gas emissions, Break unit root test

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