The Interaction Effects of Financial Development with Human Capital and Institutional Quality on Environmental Degradation: Panel Cointegration Approach

Document Type : Research Paper

Authors

1 M.Sc. Department of Economics, Faculty of Management and Human Science, Chabahar Maritime University, Chabahar, Iran

2 Associate Professor, Department of Economic, Faculty of Management and Human Science, Chabahar Maritime University, Chabahar, Iran

10.22051/ieda.2024.45430.1381

Abstract

With economic development, MENA member countries' environmental destruction and financial development have increased. Therefore, to protect the environment, it is necessary to identify the factors affecting environmental degradation, especially the impact of financial development and its adjustment mechanisms. In addition, the impact of financial development on the ecological footprint was also investigated through the channel of human capital and institutional quality. This descriptive-analytical study was conducted at the international level for MENA member countries. The data was panel data for 2000-2020, extracted from the World Bank database. Im, Sons, Shin and Levin, Lin and Chu tests were used to check reliability, Pedroni and Kao tests to check co-collinearity, and fully modified ordinary least squares (FMOLS) methods were used to estimate models in Eviews 10 software. The Financial development and GDP increased, and human capital and institutional quality decreased environmental degradation. Also, financial development reduces the destruction of the environment through the channel of human capital and institutional quality, so it is suggested that governments, while expanding the capacity of good governance, move the laws governing the financial development of countries in favour of nature-friendly industries and human capital as an important factor in quality Increase the environment.

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References

 
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