Environmental-Growth Nexus in MENA Region : Novel Evidence Based on Method of Moment Quantile Estimations

This study contributes to the environment–growth nexus augmented with institutional quality (measured by the level of corruption) using four different indicators of environmental quality: ecological footprint, carbon dioxide emissions, greenhouse gas emissions and carbon emission intensity. The sample covers 17 Middle East and North Africa (MENA) countries between the years of 1984 and 2018. To account for different relationships between the independent variables and environmental quality at different levels of environmental degradation, method of moments quantile regression is employed. According to the results, corruption worsens environmental quality based on three of the four indicators of environmental degradation, while the impact appears to become less severe with higher levels of environmental degradation. The results also indicate that traditional mean-based panel data estimation methods give an incomplete picture of the factors behind environmental degradation: the impacts of the explanatory variables tend to vary at different levels of environmental quality, and it is even possible that the sign of the impact will change when moving from the lowest to highest quantiles of environmental degradation. Overall, the results highlight the importance of curbing corruption to enable the enforcement of more stringent environmental regulations