The relationship between institutional quality and ecological footprint: Is there a connection?

Abstract

Abstract Although researchers have made significant efforts to explain the influence of institutions on environmental indicators such as CO2 emissions, the relationship between institutional quality and the ecological footprint has been neglected. The gap in the literature reveals an outstanding question: can institutions reduce their countryʼs ecological footprint? As a result, this study aims to investigate the effects of institutional quality and control variables on the ecological footprint for the period 1992–2015 in E‐7 countries through the AMG and CCEMG estimators. The findings show that institutional quality reduces the ecological footprint for the entire panel. Conversely, economic growth and energy consumption increase ecological pressure on E‐7 countries. In addition, the impact of institutional quality on the ecological footprint demonstrates heterogeneity at the country level. While institutions decrease the ecological footprint in China, India, Indonesia, and Russia, the study does not find such a relationship in other countries. Besides, energy consumption seems to be the most important factor in increasing ecological pressure in all countries. As drawn from the results, it can be said that improving institutional quality and increasing renewable resources in the energy portfolio are strategic actions in terms of improving environmental quality in E‐7 countries.

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