Economic and Sustainability: The Moderating Role of Government Quality on Environmental Deterioration in E7 Countries

Najma Taralia Farah; Anton Bawono; Citra Ayudiati

doi:10.47200/jnajpm.v11i1.3296

Authors

Najma Taralia Farah State Islamic University Sunan Kalijaga Yogyakarta Indonesia
Anton Bawono State Islamic University Sunan Kalijaga Yogyakarta Indonesia
Citra Ayudiati Universitas Cokroaminoto Yogyakarta Indonesia

DOI:

https://doi.org/10.47200/jnajpm.v11i1.3296

Keywords:

emerging seven (E7), generalized method of moments (gmm), moderated regression analysis (mra), foreign direct investment (fdi), carbon emissions

Abstract

This study aims to analyze the balance between economic growth and environmental sustainability by considering the moderating role of government quality in Emerging Seven (E7) countries using a quantitative methodology utilizing panel data from 2015 to 2024, along with the Generalized Method of Moments (GMM) and Moderated Regression Analysis (MRA) to examine the causal relationships between variables. The findings indicate that economic growth and population metrics have a positive impact on carbon emission escalation, while trade openness does not appear to have a statistically significant effect. In contrast, Foreign Direct Investment (FDI) initially presents a negative effect on carbon emissions, which shifts to a positive correlation in the context of declining government quality. This demonstrates that good governance can strengthen efforts to control carbon emissions and promote sustainable development. Thus, institutional capacity building and robust environmental policies are key to balancing economic growth and environmental preservation in E7 countries.

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