*Faculty of Economics, University of Tehran, Tehran, Iran
**Department of Management, Islamic Azad University, Tafresh Branch, Tafresh, Iran
***Faculty of Social Sciences, University of Tehran
JEL classifications: Q00, F1, F18
This paper investigates the causal relationship between environmental quality, economic growth and tradein developing countries by using panel unit root tests and panel cointegration analysis for the period 1970–2011. The results suggest that there is a long-run relationship between these variables. Emissions have a positive long-run relationship with per capita income and trade. Moreover, the results show a bidirectional strong causality between economic growth and environment in these countries. We also find bidirectional causalitybetween emissions and trade.
Unit root, Cointegration, Granger Causality, Environmental quality, Trade, Economic Growth
