The impact of institutional quality on economic growth and carbon emissions: Evidence from Indonesia, South Korea and Thailand

By M. Salman, Xingle Long, L. Dauda, Claudia Nyarko Mensah. Journal of Cleaner Production, 2019

415 citations recorded by the source corpus.

Abstract The main purpose of this paper is to explore the impact of institutional quality on growth-emissions nexus in a panel of three East Asian countries over the period from 1990 to 2016. We also incorporated energy consumption and trade openness as important indicators in the model to avoid variable bias. The results of unit root tests show that the variables are stationary at first difference. The panel cointegration test confirmed that all the variables are cointegrated. We employed Fully Modified Ordinary Least Squares and Dynamic Ordinary Least Squares methods to estimate the long-run effects of explanatory variables on economic growth. The main findings are: (i) a positive significant interaction variable between carbon emission and institutional quality indicates that efficient and impartial domestic institutions are very important to increase economic growth and decrease carbon emissions, simultaneously. (ii) Institutional quality, energy use and trade openness stimulate economic growth. (iii) The VECM granger causality test results show that there is a one-way causality runs from institutional quality to economic growth, carbon emission and energy consumption, from trade openness to carbon emissions in both short-run and long-run, from energy use to trade openness, from energy use to carbon emission in both short-run and long-run. Moreover, feedback effect is present between economic growth and carbon emission, and between economic growth and energy use in both short-run and long-run. It is therefore, necessary to regulate and strengthen the role and effectiveness of local institutions with the aim of lowering carbon emissions in the course of economic development.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/427570b6faa1090c887d685a0b0af9faf1a52461

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Citations in the corpus

The Impact of the Government Policy on the Energy Efficient Gap: The Evidence from Ukraine (2021, background): “Salman [47] studied the link of economic growth, greenhouse gas emissions, and energy consumption and defined the institutional quality as a mediator in that relation.”
The roles of export diversification and composite country risks in carbon emissions abatement: evidence from the signatories of the regional comprehensive economic partnership agreement (2021, background): “KEYWORDS Exports diversification; composite risk index; CO2 emissions; CS-ARDL approach; regional comprehensive economic partnership (RCEP) JEL CLASSIFICATION C31; F18; Q54; R10 I. Introduction The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement initiated by Indonesia be”