Economic globalization, industrialization, institutional effectiveness and environmental quality: a global panel data analysis
Year: 2026
Type: article
Abstract: Despite the growing volume of empirical studies focusing on environmental quality and its determinants, the degree of complexity and mixed results have increased over the last several decades. The study examines the effects of economic globalization, industrialization, and institutional effectiveness on environmental quality using panel data from 10 high-income, 14 middle-income, and 9 low-income countries. The study period covers 2000–2022. The growth-emission hypothesis was also examined for all cases analyzed. We run four panel data regression models: FMOLS, DOLS, fixed effects, and GMM. The results of economic globalization show mixed effects on environmental quality across all cases analyzed. Findings show gross domestic product (GDP) and industrialization appeared to be the main drivers of environmental degradation. Urbanization has a negative, significant effect on CO2 at global and high-income levels but a positive effect on middle-income nations. Control of corruption exerts a positive and significant effect on environmental quality for the whole sample and the high-income group. There is an inverted U-shaped nexus between economic growth and environmental quality for the whole sample and high-income countries. A mixed result is found for middle-income countries. The study provides policymakers with important information, highlighting potential sources of emissions across income levels. Impact Statement The study provides insightful evidence on the effect of economic globalization, industrialization, government effectiveness, and gross domestic product on environmental quality in 33 sample countries. By applying various econometrics models, the study finds that GDP, industrialization, and economic globalization are important drivers of carbon emissions. The study contributes to the growth-emission hypothesis literature across three income classifications: high-income, middle-income, and low-income countries. The results point out the importance of distinct climate strategies, more robust institutional frameworks, and sustainable industrial policies that is adapted to the particular circumstances of each income group. Given the degree of resilience, countries would adopt a holistic green environmental policy to achieve zero emissions.
Source: Figshare
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7166166340