Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method

Version 1 : Received: 18 April 2022 / Approved: 18 April 2022 / Online: 18 April 2022 (10:38:40 CEST)

How to cite: Azam, M.; Abbassi, W.; Tayachi, T.; Azam, R.I. Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method. Preprints 2022, 2022040164 (doi: 10.20944/preprints202204.0164.v1). Azam, M.; Abbassi, W.; Tayachi, T.; Azam, R.I. Impact of Socioeconomic Factors on Environmental Quality: A Panel Quintile Regression Method. Preprints 2022, 2022040164 (doi: 10.20944/preprints202204.0164.v1).

Abstract

Nowadays, determining the socioeconomic factors' influence on environmental quality is a crucial issue for policymakers. We aim to explore the impact of socioeconomic factors i.e., ethnic conflicts inform ethnic fragmentation, institutions quality effectiveness, and energy consumption on environmental quality by testing the various hypotheses (Pollution Halo Hypothesis, IPAT, and EKC) in 40 selected Asian countries throughout 1993-2019. We also use a set of control variables which are gross domestic product per capita, foreign direct investment inflows, and population growth to determine their impact on environmental quality. We use the Panel Quintile Regression Method of 0.25, 0.5, and 0.75 to analyze the results. We find ethnic conflict negatively affects the environmental quality at all quantiles. The institution's variables regulatory quality and rule of law negatively influence the environmental quality. Our result supports Porter's hypothesis because the effect of direct foreign investment on the amount of CO2 emissions is negative and significant at 0.25, 0.5, and 0.75 quantiles which states that foreign direct investment in the host country supports environmental quality. Furthermore, our results support the IPAT hypothesis in selected Asian countries.

Keywords

Environmental quality; institutional quality; ethnic conflicts; socio-economic factors

Subject

SOCIAL SCIENCES, Finance

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