The Impact of Corruption on Carbon Dioxide Emission: A Direct and Indirect Impact Approach in Group D8 Countries

Subject Areas : Environmental Economics

leila Hemati ¹ (PhD student in Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.)
mostafa emadzadeh ² (Economic Sciences Department. Islamic Azad University Isfahan (Khorasgan) Branch)
saeed karimzade ³ (Associate Professor, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran. *(Corresponding Author))

Received: 2020-07-04 Accepted : 2020-11-17 Published : 2022-01-21

Keywords: Corruption, FMOLS Approach, Carbon Dioxide Emission, PMG Approach,

Abstract :

Background and Objective: The issue of environmental crises has become very important in scientific circles in recent years, because overa the years many factors, including financial and administrative corruption, have caused environmental damage. Therefore, in this study, it is attempted to examine the direct and indirect effects of financial and administrative corruption index (International Risk Corruption Index) on environmental quality index (CO2) during the period 2018 -1984, for Group D8 countries.Material and Methodology: To investigate the purpose of this study used of fully modified least squares (FMOLS) approaches, Integrated Group Mean (PMG), Group Mean (MG). The highlight of this study is to distinguish the effects of corruption on pollution directly, indirectly and generally.Finding: So that the estimation of direct, indirect and total effects in both FMOLS and PMG estimation models has been incremental. These results indicate that in the model of direct effects, the relationship between the two variables of corruption and CO2 emission has a U-shaped relationship. In the model of indirect effects, economic growth initially increases with increasing corruption, but as it reaches its maximum point and excessive corruption increases in a country, the rate of economic growth also decreases significantly and an inverse U relationship is formed.Discussion and Conclusion: That is, it is initially reduced by increasing corruption, CO2 emissions, and pollution, because the early stages of corruption are usually associated with improved economic, social, and environmental variables, but in the long run with increasing levels of corruption and corruption throughout. Organizational and institutional layers, pollution will also increase.

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