Climate change, governance, and economic growth in Asia: a panel cointegration analysis

Abstract

Asian economies are extremely vulnerable to climate due to rapid economic progress, poor governance structure and governmental performance. Keeping in view the fragility of Asia economies in context of environmental deterioration, we examine the role of climate change in shaping economic progress based on an extensive dataset of 47 Asia economies over the period of 2010–2020 through advance panel estimation models such as FMOLS and DOLS for long-run relationships, and panel-VECM for granger causality. The finding suggests a long run positive impact of climate change on economic progress. Further, the results also support the bi-directional relationship between climate change and economic development in Asia region. Hence, the current research suggest that proper policies should be warranted to balance government effectiveness for the increased implementation of environmental regulations and economic prosperity to meet the needs of society and maintain environmental sustainability in the long run.

Public interest statement

We examine the relationship among climate change, governance and economic development in Asia, as this region is extremely vulnerable to disastrous impact of global warming. We ascertained the long relationship among climate change, governance and economic progress and hence suggested that policy makers may design a comprehensive governance policy related to environment in order to achieve sustainable economic development in Asia.

Keywords:

• Governance
• climate change
• economic growth
• panel data
• Asia

REVIEWING EDITOR:

• David McMillan, University of Stirling, United Kingdom

SUBJECTS:

• Development Policy
• Economics and Development
• Environment & the Developing World
• Economics
• Finance
• Business, Management and Accounting

JEL CLASSIFICATION:

• C23
• G38
• H11
• O44
• F64
• Q5

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Sabeeh Ullah

Sabeeh Ullah is an Assistant Professor of finance in the Institute of Business & Management Sciences (IBMS), Faculty of Management & Computer Sciences (FM&CS), The University of Agricultural Peshawar, Pakistan. His research interest includes Stock markets, corporate finance, corporate governance and financial econometrics.

Muhammad Arif

Muhammad Arif is a Master of Science (MS) scholar in the Institute of Business & Management Sciences (IBMS), The University of Agricultural Peshawar, Pakistan. His research interest includes Corporate Finance

Shahzad Hussain

Shahzad Hussain is an Assistant Professor at Rawalpindi Women University (RWU), Pakistan. His research interest includes Corporate Finance and Financial Economics and Green Finance and sustainable development.

Mamdouh Abdulaziz Saleh Al-Faryan

Mamdouh Abdulaziz Saleh Al-Faryan is a visiting Researcher at the University of Portsmouth, school of accounting, economics and finance, faculty of business and law. Mamdouh is a member of forty national and international professional associations. He has worked tirelessly to expand his experience and financial acumen, which would guide him down the path into leadership and higher level of responsibility. So far, he has several publications in the field of economics, finance, corporate govern-ance, and accounting, which have been published in top international journals. Mamdouh also serves as a reviewer for a number of international journals and holds academic and research distinction