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The Moderating Effect of Institutions on the Relationship between Financial Development and Environmental Quality: Evidence from GCC countries

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Title The Moderating Effect of Institutions on the Relationship between Financial Development and Environmental Quality: Evidence from GCC countries
 
Creator Ghardallou, Wafa
Abaalkhail, Layla
 
Subject Carbon emissions
Dynamic GMM
Financial development
Institutions
Moderating effects
 
Description 836-844
The existing literature does not present a unified perspective on the impact of financial development on environmental
quality. Consequently, this study seeks to enhance existing knowledge by investigating how institutions moderate the
relationship between financial development and carbon emissions. It uses a dynamic GMM model to estimate a panel data
of GCC countries over the period 2010–2020. Financial system development has been proxied by both the development of
the banking sector and the development of the financial markets. The findings indicate that there is a significant increase in
carbon dioxide emissions as a result of financial development. Nevertheless, the presence of strong institutions mitigates this
effect, leading to a reduction in carbon emissions. Indeed, findings reveal that control of corruption, good quality of
regulations and a strong rule of law contribute to reduce pollution effects of financial development. In light of this,
policymakers should focus on enhancing institutional quality while redirecting their focus towards environmentally
responsible financial practices. This approach will bolster the impact of financial development in effectively improving
environmental quality.
 
Date 2024-08-12T10:26:53Z
2024-08-12T10:26:53Z
2024-08
 
Type Article
 
Identifier 0022-4456 (Print); 0975-1084 (Online)
http://nopr.niscpr.res.in/handle/123456789/64407
https://doi.org/10.56042/jsir.v83i8.8926
 
Language en
 
Publisher NIScPR-CSIR,India
 
Source JSIR Vol.83(8) [August 2024]