Environmental Performance and a Nation’s Growth: Does the Economic Status and Style of Governance of a Country Matter?

Shailesh Rastogi, Jagjeevan Kanoujiya, Pracheta Tejasmayee (), Souvik Banerjee, Neha Parashar and Asmita Dani
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Shailesh Rastogi: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India
Jagjeevan Kanoujiya: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India
Pracheta Tejasmayee: Symbiosis Institute of Business Management, Symbiosis International (Deemed University), Pune 412115, India
Souvik Banerjee: Management Development Institute Murshidabad, Murshidabad 742235, India
Neha Parashar: Symbiosis School of Banking and Finance, Symbiosis International (Deemed University), Pune 412115, India
Asmita Dani: Academics, Symbiosis International (Deemed University), Pune 412115, India

JRFM, 2023, vol. 16, issue 10, 1-19

Abstract: The literature abounds with studies on the impact of the growth of nations on the environment. However, studies on the financial materiality of environmental concerns are found less often. This study aims to determine the impact of environmental concerns on a nation’s GDP per capita (GDPC). In addition, the influence of developed nations and democracy is also explored. The data for 106 countries and ten years (2011–2020) are procured from World Bank’s official website. The countries with incomplete data for a balanced panel are not included. Panel data econometrics (quantile regression) is applied to analyze the data. Environmental concerns are measured with the help of environmental efficiency (EE) using data envelopment analysis (DEA). It is found that environmental efficiency (EE) negatively impacts the GDPC for low levels of GDPC. However, no association of EE with GDPC is witnessed in the case of high GDPC levels. In addition, developed nations positively moderate the EE’s impact on the GDPC when the GDPC levels are high. Moreover, democratic nations negatively moderate the EE’s impact on the GDPC when low GDPC levels exist. The main implication of the current study is that developed high GDPC countries could bear a significant chunk of the cost of EE. This way, the adverse impact of an increase in EE on the GDPC (by low GDPC counties) could be dodged, and by the efforts of developed high GDPC countries, EE could be increased significantly without adversely impacting their GDPC.

Keywords: environmental efficiency; GDP per capita; moderation; emerging economy; democracy (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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