Economic Policy Uncertainty, Social Development, Political Regimes and Environmental Quality

Hang Su, Yong Geng, Xi-Qiang Xia and Quan-Jing Wang
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Hang Su: School of Economics and Finance, Xi’an Jiaotong University, 74 Yanta Road, Yanta District, Xi’an 710061, China
Yong Geng: School of Business, Shanghai Jiaotong University, 800 Dongchuan Road, Minhang District, Shanghai 200240, China
Xi-Qiang Xia: School of Business, Zhengzhou University, 100 Kexue Road, Zhengzhou 450001, China
Quan-Jing Wang: School of Business, Zhengzhou University, 100 Kexue Road, Zhengzhou 450001, China

IJERPH, 2022, vol. 19, issue 4, 1-15

Abstract: This paper aims to examine the influence of Economic Policy Uncertainty (EPU) on environmental performance, as well as the moderating effect of social development and the political regimes in EPU’s influence on environmental performance. To investigate such essential issues, we conducted Generalized Method of Moments (GMM) estimations by utilizing cross-country data covering 137 countries during the period of 2001–2018, according to the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model. Our empirical estimations support that EPU negatively affects environmental performance; this idea was still supported when we conducted an empirical analysis by changing the measurements, employing alternative estimations and constructing new samples. Furthermore, not only would the absolute level of EPU bring worse environmental performance, but so would an increase in EPU. Moreover, higher economic performance, globalization and a high quality of governance can help countries to alleviate the adverse environmental effect of EPU. Additionally, EPU’s negative effect on environmental performance is stronger in right-wing countries, autocracies and non-OECD countries, compared to their counterparts. Our study provides substantial policy implications for governments participating in the international treaties of environmental protection, to mitigate environmental degradation.

Keywords: economic policy uncertainty; environmental performance; increasing EPU; social development; different political regime (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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