Mitigating environmental degradation with institutional quality and foreign direct investment (FDI): new evidence from asymmetric approach

How wealthy in natural resource leads environmental sustainability in developing economies? An empirical investigation

This study investigates the impact of income generated from natural resources on environmental sustainability and analyses the moderating role of institutional quality in carbon emissions function. An extensive dataset from 61 developing nations covering the years 2000-2018 has been taken, which uses a dynamic heterogeneous panel data model. Our study follows a rigorous methodology by applying the pooled mean group estimator. An extensive examination of the impacts over the short run and long run is possible using this method. This study reveals multifaceted findings: in the short run, the effect of institutional quality and natural resources revenues on carbon emissions is insignificant, implying that such factors have a relatively minor impact. The long-term examination reveals that income derived from natural resources causes a spike in carbon emissions, which causes environmental deterioration and climate change. Strong institutional quality can significantly mitigate the adverse effects of correlation between revenues from natural resources and carbon emissions, which have been observed. The study's moderating effect of natural resources richness, which gradually reduces institutional quality's ability to reduce carbon emissions, is a crucial finding. Our study significantly advances the field of environmental economics, especially when discussing sustainable development in emerging nations with abundant natural resources. It emphasizes the delicate balance that must be struck between preserving efficient environmental governance and maximizing the richness of natural resources. Our findings underscore the crucial need for developing nations to strengthen their institutional frameworks and capacities and have substantial policy implications. These steps are essential to ensuring that the use of natural resources is in line with environmental sustainability objectives, turning resource curses into blessings for long-term development and environmental preservation. This research opens the door to sector-specific impacts and personalized policy interventions in resource-rich developing economies.

Effects of geopolitical risk on environmental sustainability and the moderating role of environmental policy stringency

This study investigates the impact of geopolitical risk (GPR) on consumption-based carbon (CCO2) emissions as well as the moderating role of environmental policy stringency (EPS) on the above relationship. Based on data collected from 27 countries from 1990 to 2020, the basic results from the sample of the study indicate that GPR accelerates CCO2 emissions. Quantile regression results reveal that the effect of GPR is more pronounced in countries with higher CCO2 emissions. Moreover, EPS weakens the escalating effect of GPR on CCO2 emissions. The robust test results validate the findings reported in the basic regression model. The heterogeneity test indicates that the impact of GPR on CCO2 emissions is greater in developing countries compared in developed countries. The study also proposes these policy implications based on the findings: (1) countries should ensure a stable political environment, establish a robust legal system and promote energy transition; and (2) the scope of environmental taxes should be expanded where different tax rates should be imposed in order to be useful in reducing CCO2 emissions.

Ecofeminism or techno-centrism? Analysing the gender-environment concoction in the Anthropocene: a study of OECD countries

Women's participation and technological innovation have a crucial role in ensuring environmental sustainability in the long-run. However, the nature of this relationship has diverse opinions across the continuum. The present study focuses on the empirical relevance of this debate based on the theoretical underpinnings of ecofeminism and techno-centrism, using panel data on 37 OECD countries for the period 1990-2019. Employing the Pooled Mean Group (PMG) approach, the study constructs two models, based on ecofeminism and techno-centrism, respectively, and finds that both have a negative and significant impact on environmental degradation measured by the ecological footprint. The results suggest that equality of women in the labour markets and technological innovation through R&D expenditure are both viable developmental tools for ensuring environmental sustainability. Moreover, the empirical estimation also confirms the existence of an N-shaped environmental Kuznets curve between economic growth and environmental degradation in the case of selected OECD countries in both ecofeminist and techno-centric models.

Dose institutional quality influences the relationship between urbanization and CO2 emissions?

As a result of rapid economic expansion, increased energy use, and urbanization, global warming and climate change have become serious challenges in recent decades. Institutional quality can be the remedy to impede the harmful effect of factors on environmental quality. This study investigates the impact that urbanization and institutional quality on environmental quality in in the Belt and Road Initiative (BRI) countries from 2002 to 2019. By using two step generalized method of moment, the findings shows that urbanization leads to an increase in carbon dioxide emissions and a decline in environmental quality. On the other hand, the square term of urbanization indicates that an increase in urbanization leads to a reduction in emissions at a later stage after reach a certain level. Education, on the other hand, has the reverse impact of increasing carbon emissions; economic growth, foreign direct investment, and government effectiveness all boost carbon emissions. In a similar vein, the interaction between urbanization and the effectiveness of the government is unfavorable, underscoring the transformative role that the effectiveness of the government plays in leading to environmental sustainability. Finally, the findings of this study have considerable policy implication for the sample countries.

Environmental impact of foreign direct investment in Turkey: does the quality of institutions matter? Evidence from time series analysis using the Fourier extension

Since the 1980s, Turkey has experienced a significant increase in both foreign direct investment (FDI) and its ecological footprint (EFP). While FDI is widely acknowledged as a pivotal driver of economic growth, its impact on environmental degradation is multifaceted and debated. Moreover, a country's institutional framework plays a key role in shaping this relationship. Yet, the influence of institutional structures on the FDI-environment nexus is often neglected in current literature. In this study, we investigate the environmental implications of FDI in Turkey from 1984 to 2018, employing time series analysis with a Fourier extension and accounting for institutional quality. Fourier function models give more effective results in modeling structural breaks. We first use Fourier techniques to assess the unit root and cointegration relationship. Upon establishing cointegration, we employ the DOLS estimator, extended with Fourier terms, to determine the long-term coefficients. We then assess the causal relationship between the variables using the Fourier causality test. Our findings indicate that while FDI exacerbates environmental degradation (supporting the pollution haven hypothesis), the interaction term of FDI-institutional quality mitigates this degradation (supporting the pollution halo hypothesis). Given these empirical findings, this study suggests that strengthening Turkey's institutional quality has the potential to amplify the environmental advantages of FDI, alongside its economic benefits.

How institutional quality, and energy production sources, affect the environmental sustainability of bri countries: A comparison of different income groups

Institutions and energy production sources shape environmental policies and practices. Institutions establish frameworks for renewable energy and enforce environmental protection measures. Conventional energy sources cause pollution and climate change, while green energy sources have lower environmental impacts. In this study we analyzed how quality institutions, along with different types of energy production sources affect the quality of environment in 101 countries that are part of the BRI, a global development project. We used a statistical method called panel quantile regression to analyze data from 2000 to 2020. We found that producing energy from renewable sources, such as wind and solar, reduces CO2 emissions by 0.003% in BRI countries. However, producing energy from non-renewable sources, such as gas and coal, harms the environment more in high-income and middle-income countries. We also found that having better institutional quality reduces CO2 emissions by 3.421%, 2.710%, and 0.006% in different groups of BRI countries. This means that having stronger and fairer institutions can help protect the environment by limiting the use of non-renewable energy sources and encouraging the use of renewable ones. Our study suggests that improving institutional quality is a key factor for achieving green energy and environmental sustainability in BRI countries.

Linking governance with environmental quality: a global perspective

Sustainable environmental quality is a global concern, and a concrete remedy to overcome this challenge is a policy priority. Therefore, this study delves into the subject and examines the effects of governance on environmental quality in 180 countries from 1999 to 2021. To maintain comparability and precision, we first classify countries into full and income-level panels and then, innovatively, construct a composite governance index (CGI) to capture the extensive effects of governance on CO2 emissions. Complementing the stationarity properties of the variables, we employ the cross-sectionally augmented autoregressive distributed lags model to analyze the data. Our survey yields four key findings. First, a long-run nexus between CGI, CO2 emissions, and other control variables is confirmed. Second, the findings indicate that CGI is crucial to improving environmental quality by reducing CO2 emissions across all panels. Third, we find that while CGI maintains a similar magnitude, the size of its effects substantially varies according to the income level of the underlying countries. Fourth, the findings reveal that energy consumption, population growth rate, trade openness, and urbanization contribute to environmental degradation, while financial development and the human development index are significant in reducing CO2 emissions. Our findings suggest specific policy implications, summing up that one common policy is not a good fit for all environmental quality measures.

Investigating possibility of achieving sustainable development goals through renewable energy, technological innovation, and entrepreneur: a study of global best practice policies

This study is anchored on the global best practice policies for achieving sustainable goals for Malaysia. Malaysia is among the countries that made commitment at 2015 United Nations Climate Change Conference to reduce its carbon emissions by 2030. This is expected to contribute to the country's sustainable development. Malaysian quarterly data of 1992Q1-2019Q4 with relevant policy-based instruments (renewable energy policy, technological innovations, financial development, and entrepreneur activities) are adopted in our study for explicit and clear insight on the subject. Different scientific and analytical methods are equally applied in this study, but the focus and emphasis are laid on the findings from linear (dynamic ordinary least square, DOLS) and non-linear autoregressive distributed lag (NARDL) and Granger causality. Findings from both NARDL and DOLS confirmed the positive shocks of renewable energy policy, technological innovations, financial development, and entrepreneur activities are mitigating carbon emissions. Also, inverted U shape of EKC hypothesis is found for Malaysia. Findings from Granger causality support the findings from both estimates by establishing both feedback and unidirectional causal nexus among the instruments. From the finding myms, policy-based instruments are mitigating carbon emissions in Malaysia; thus, it will be a very good idea to frame policies around these instruments.

Nexus between disaggregated energy sources, institutional quality, and environmental degradation in BRI countries: a penal quantile regression analysis

The present study aims to contribute to the existing literature by examining the role of institutional quality in the nexus of disaggregated energy sources and environmental degradation for belt and road initiative countries. To empirically support the theoretically presented propositions, a series of analytical techniques are used, such as LLC, IPS for unit root, Johansen-Fisher panel co-integration to check the long-run association between the considered variables from 2000 to 2020. Further, a panel quantile regression and panel fixed effect model is used in the study to explore the nexus. The study found a long-run association between institutional quality (IQ), energy production from oil (EPOil), natural gas (EPGas), coal (EPCoal), renewables (EPRenew), and CO₂ emission in BRI countries. According to panel unit-root tests, all variables are integrated of order I(1), and the panel co-integration test showed a log-run association among variables. The results of panel quantile regression and panel fixed effect model showed a positive association between IQ and CO₂ emission. Similarly, an association of CO₂ emission with EPGas, EPOil, and EPCoal is also significantly positive. The extraction and use of fossil fuels (natural gas, oil, and coal) pollute the air, while, on the other hand, there is a negative relationship found between CO₂ emission and EPRenew. When developing environmental protection measures, governments should choose to concentrate on the quality of institutions. The effectiveness of institutions in BRI countries will provide appropriate rules, regulations, property rights, and methods to fight corruption, which, if followed systematically, would decrease CO₂ emissions and enhance the quality of the environment in BRI countries.

Nexus among electricity consumption, foreign direct investment and aggregate economic activity towards Nigeria's economic performance: evidence from a trivariate causality model

It is evident that there is nexus among electricity consumption, foreign direct investment and aggregate economic activity. Unfortunately, the causal relationship among the three variables in Nigeria based on modern econometric methods, recent time-series data and ways that sufficiently cater for inflation and population growth has not been adequately investigated. This study, among other things, used a trivariate vector error correction model, autoregressive distributed lag bounds test for cointegration and Granger causality test to analyse the causal relationship among electricity consumption, foreign direct investment and aggregate economic activity based on time-series data from 1970 to 2018. The study found the presence of neutral causality between electricity consumption and aggregate economic activity in the short run as well as unidirectional causality from aggregate economic activity to electricity consumption in the long run. The study also found the presence of unidirectional causality from foreign direct investment to electricity consumption as well as neutral causality between foreign direct investment and aggregate economic activity in both the short run and the long run. It is therefore recommended that steps should be taken to adequately increase foreign direct investment and aggregate economic activity in ways that will guarantee an optimal increase in electricity consumption in Nigeria.

The effect of technological innovation, FDI, and financial development on CO2 emission: evidence from the G8 countries

The nexus of foreign direct investment and economic growth has been extensively investigated by the researchers of environmental economics; however, few studies have been conducted to find the impact of financial development and technological innovation in the backdrop of the environment. In the G8 countries (UK, USA, Canada, Germany, France, Italy Russia, Japan), the rapid increase in urbanization resulting from their speedy economic growth has brought about a huge increase in energy consumption that is in turn responsible for contemporary environmental degradation. This research intends to find the impact of technological innovation, financial development, foreign direct investment, energy use, and urbanization on carbon emission in G8 member countries, based on data from 1990 to 2019. The findings present strong cross-sectional dependence within the panel countries. According to the FMLOS estimator, a statistically significant long-run and negative association with CO2 has been found between foreign direct investment, financial development, and technological innovation in G8 countries. A long-run bidirectional causality has been found among economic growth, financial development, urbanization, trade openness, CO2 emission, and energy use; antithetically there is unidirectional causality between carbon emission and foreign direct investment. A quality foreign direct investment is the present demand for the development of industries, technological innovation, and financial development for G8 countries. Furthermore, urbanization plays a major role in environmental degradation, and more improved policies are needed for these countries.