Effect of Institutional Quality and Financial Development on Environmental Degradation: Panel Data Analysis in the Context of 10 Asian Countries

Abstract

The study examines the impact of institutional quality and financial development on environmental degradation in ten Asian nations from 2001-to-2021. Factors like GDP, industrialization, urbanization, and financial growth were analyzed using various econometric methodologies. The fixed effect method showed that GDP, FD, INST, and IND positively affect CO2 emissions in the selected Asian countries. However, only POP had a negative effect. The study suggests that policymakers should incorporate environmental considerations into economic policies, implement environmental taxes and subsidies, promote sustainable consumption and production, and incentivize environmentally responsible practices.