Role of Environmental Governances in Shaping Environmental Performance
DOI:
https://doi.org/10.5281/zenodo.16542071Keywords:
Environmental Expenditures, Environmental Performance, MM-QR, BS-QRAbstract
Environmental governance plays an important role in shaping environmental performance because it promotes effective policy implementation and sustainable management of resources in the countries. Effective governance structures facilitate the enforcement of environmental regulations allowing countries to tackle ecological challenges more effectively. The study aims to explore the impact of environmental governance (measured by expenditures on environmental protection (as % of GDP)) on environmental performance (measured by environmental performance index). The study used the panel data of 38 OECD countries from 1990-2023 and applied the Method of Moment Quantile Regression (MM-QR) method to estimate the results at different quantiles. Further, the study also used Bootstrap Quantile Regression (BS-QR) to check the robustness of MM-QR. The dependent variable is the environmental performance index while the independent variables are environmental governance measured by expenditures on environmental protection, economic growth measured by GDP growth, squared of GDP growth, population growth, urban population growth, foreign direct investment, and industry value added including construction and trade openness. The variables of environmental governance, squared of GDP growth and trade have a positive impact on environmental performance. On the other hand, GDP growth, population growth, urbanization, foreign direct investment and industry value added have a detrimental impact on environmental performance. The results from the BS-QR method are consistent with those obtained from the MM-QR, confirming the robustness of the findings across different quantile regression techniques. Therefore, it is recommended that policymakers enhance investment in environmental protection in order to improve environmental performance in the context of OECD countries.
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