The Role of Environmental Quality, Financial Development and Institutional Quality in Sustainable Economic Growth: Evidence from China
Year: 2025
Type: article
Abstract: China's robust economic growth serves as a key driver propelling the global economy forward.As such, understanding the factors influencing its sustainable economic growth remains a critical concern for stakeholders.In this context, this study aims to investigate the key determinants of China's sustainable economic growth.Specifically, it examines the effect of environmental quality, institutional quality and financial development on sustainability in the Chinese context.To achieve this, the study employs a range of econometric analyses, including Ordinary Least Square (OLS), Generalized Method of Moments (GMM), and Quantile Regression (QR), using data spanning 2002 to 2019.The empirical findings reveal that environmental quality, institutional quality and financial development significantly contribute to China's sustainable economic growth.Additionally, the interaction effects of the institutional environment provide nuanced insights into the relationship.This study offers valuable implications for policymakers, highlighting the need to prioritize impactful financial inclusion over mere financial sector expansion, alongside focusing on other growth-enhancing initiatives.This study contributes to the body of knowledge by providing empirical evidence of the interaction effect of the institutional environment within this framework.
Source: Contemporary Economics
Authors: Yuqing Cai, Habib Ur Rahman, Ali Burhan Khan, Muhammad Fareed
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7085626667