Abstract/Description
Researchers have produced varying conclusions on the matter of coexistence of economic activities with the protection or improvement of environmental performance. This study investigates the association between greenfield investments, economic activity, institutional quality, and environmental performance in Belt & Road Initiative (BRI) countries from 2003 to 2022. Yale University's Environmental Performance Index (EPI) assesses environmental performance. Advanced second-generation econometrics estimation approaches address concerns like cross-sectional dependence, potential endogeneity, and heterogeneity. Further analysis is employed across four income-level sub-panels: lowincome (LI), lower-middle-income (LMI), upper-middle-income (UMI), and high-income (HI) countries, covering the years 2003 to 2021 to validate reliability and consistency. This study applies innovative estimation methods such as causality tests, co-integration analysis, and Driscoll-Kraay standard errors to analyze datasets from the same timeframe. The results underscore the significant and positive impact of greenfield investment, economic activity, and institutional quality on environmental performance across all BRI countries. Greenfield investment positively affects countries within all sub-panels, while economic activity has a negative impact on UMI, LMI, and LI countries. Furthermore, institutional quality negatively affects environmental performance in HI and UMI countries but positively influences LMI and LI countries. These findings highlight bidirectional causality between economic activity and environmental performance, whereas greenfield investment and institutional quality exhibit unidirectional causality in BRI countries.
Keywords
Economic activity, environmental performance, institutional quality, BRI countries
Location
S1 room, Adamjee building
Session Theme
Environment, Energy, and Growth Nexus
Session Type
Parallel Technical Session
Session Chair
Heman Das Lohano, Institute of Business Administration
Session Discussant
Sahar Mahmood, Institute of Business Administration ; Junaid Memon, Institute of Business Administration
Start Date
9-12-2024 2:30 PM
End Date
9-12-2024 4:30 PM
Recommended Citation
Hussain, J., & Hassan, S. (2024). Role of greenfield investment, institutional quality, and economic activities on environmental performance in belt & road initiative countries. CBER Conference. Retrieved from https://ir.iba.edu.pk/esdcber/2024/program/14
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Role of greenfield investment, institutional quality, and economic activities on environmental performance in belt & road initiative countries
S1 room, Adamjee building
Researchers have produced varying conclusions on the matter of coexistence of economic activities with the protection or improvement of environmental performance. This study investigates the association between greenfield investments, economic activity, institutional quality, and environmental performance in Belt & Road Initiative (BRI) countries from 2003 to 2022. Yale University's Environmental Performance Index (EPI) assesses environmental performance. Advanced second-generation econometrics estimation approaches address concerns like cross-sectional dependence, potential endogeneity, and heterogeneity. Further analysis is employed across four income-level sub-panels: lowincome (LI), lower-middle-income (LMI), upper-middle-income (UMI), and high-income (HI) countries, covering the years 2003 to 2021 to validate reliability and consistency. This study applies innovative estimation methods such as causality tests, co-integration analysis, and Driscoll-Kraay standard errors to analyze datasets from the same timeframe. The results underscore the significant and positive impact of greenfield investment, economic activity, and institutional quality on environmental performance across all BRI countries. Greenfield investment positively affects countries within all sub-panels, while economic activity has a negative impact on UMI, LMI, and LI countries. Furthermore, institutional quality negatively affects environmental performance in HI and UMI countries but positively influences LMI and LI countries. These findings highlight bidirectional causality between economic activity and environmental performance, whereas greenfield investment and institutional quality exhibit unidirectional causality in BRI countries.
