Financial development, globalization, energy consumption, and environmental quality: Does control of corruption matter in South Asian countries?

Abstract

This research is motivated by the urgent need to address environmental quality challenges in South Asian economies. By examining the interplay of financial development, globalization, energy consumption, and corruption control, the study aims to identify strategies mitigating environmental degradation and fostering sustainable development in the region. The prime objective of this research is to examine the correlation between financial development, globalization, and energy consumption with environmental quality in South Asian economies. Moreover the study has also examined the moderating role of corruption control in the relationship between financial development, globalization, and energy consumption with environmental quality in South Asian economies. The research incorporates data from 1996 to 2019. Panel co-integration technique is employed to investigate the long-term correlations, and fully modified ordinary least squares is utilized to determine the coefficients of co-integrating vectors, ensuring a comprehensive and robust analysis of the examined variables The study finds that energy consumption, financial development, and globalization negatively affect South Asia’s environment. However, the presence of corruption control measures can mitigate these impacts therefore, given the region’s corruption concerns, effective anti-corruption measures become crucial to address environmental degradation. The empirical results stress the need for implementing such measures to alleviate adverse environmental effects in this specific area. The results implies that policymakers should balance economic growth with environmental sustainability, recognizing the interconnectedness of these factors. Thre results of the study highlights that addressing corruption is crucial in environmental policymaking, and policymakers should prioritize anti-corruption initiatives alongside conservation efforts. The study also suggests strengthening institutional frameworks and governance structures to curb corruption, creating an environment conducive to sustainable development. Future policies should integrate anti-corruption measures into environmental conservation strategies. The study highlights the need for anti-corruption measures in South Asia, in line with Sustainable Development Goals 16 and 13, to combat environmental degradation caused by energy consumption, financial development, and globalization, thereby promoting peace, justice, and strong institutions.