An experimental pursuit of sustainable economic growth

Abstract

The study scrutinizes the dynamic influence of economic growth, financial development, trade openness, and savings on CO2 emissions in countries hard hit by hazardous weather occurrences, from 1996 to 2019. Furthermore, the study examines the role of good governance as an instant remedy to the problem. Therefore, we estimate the institutional quality index to measure good governance through institutional excellence and employ the panel ARDL/PMG method for estimating long-run worsening strikes of underlined factors. Statistical outcomes unveil that economic growth and financial development have a detrimental impact on the environment. Numerical findings reveal that a one-unit growth in the real GDP and domestic credit caused 0.88 and 0.39 units of intensification in CO2 emissions, respectively. Gross domestic savings indicate an advantageous impact on CO2 emissions, implying that the higher saving rates are favorable for environmental quality. Moreover, trade openness is positively insignificant to the CO2 emissions in the sample countries. Further assessment of the study reveals that good governance can play a vital role in helping sample countries to achieve sustainable economic growth in the long run.