The Ambivalent Role of Institutions in the CO2 Emissions: The Case of Emerging Countries

Canh Nguyen, Nhi Ai Nguyen, Christophe Schinckus and Thanh Su
Additional contact information
Nhi Ai Nguyen: University of Economics Ho Chi Minh City, Vietnam,
Christophe Schinckus: RMIT University Vietnam, Vietnam,

International Journal of Energy Economics and Policy, 2018, vol. 8, issue 5, 7-17

Abstract: The CO2 emission is a very urgent theme for emerging economies that are currently producing 60% of the global emissions. Because these countries generally have a high economic growth, they usually face with environmental issues. This article investigates the relationship between the economic activity, and more precisely economic integration (trade openness and FDI inflow), on CO2 emissions by taking into consideration the potential role played by institutions. Through sys-GMM estimators, our analysis investigates a sample of 36 emerging economies on a period going from 2002 to 2015. Our major findings are the following: (1) The economic integration increases CO2 emissions, supporting the pollution-haven hypothesis for emerging economies; (2) the improvement of institutional quality also increases CO2 emissions via the increase of economic activities it generates; (3) more interestingly, the improvements of institutions can reduce the positive effect of FDI inflow and trade openness on CO2 emissions. We will explain this observation through the lens of the well-known Environmental Kuznets curve suggesting that an improvement of institutional quality goes hand in hand with financial and trade openness of emerging economies if these countries want to fight against global warming in the long term.

Keywords: CO2 emissions; Economic integration; Environment; Institutions. (search for similar items in EconPapers)
JEL-codes: E02 F15 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.econjournals.com/index.php/ijeep/article/download/6773/3919 (application/pdf)
https://www.econjournals.com/index.php/ijeep/article/view/6773/3919 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2018-05-2

Access Statistics for this article

International Journal of Energy Economics and Policy is currently edited by Ilhan Ozturk

More articles in International Journal of Energy Economics and Policy from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().