A global perspective of market reaction to environmental quality: evidence from dynamic panel approach

Q2 Economics, Econometrics and Finance

International Journal of Green Economics Pub Date : 2020-01-01 DOI:10.1504/ijge.2020.10034621

Farzan Yahya, H. Pham, M. Waqas

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引用次数: 1

Abstract

This study investigates the effect of environmental quality on stock market performance in the parliamentary and presidential system with the interactive effects of democracy and Foreign Direct Investment (FDI) in 80 countries from 2006 and 2016 using a two-step GMM model. First, we test the direct effect of environmental quality, democracy and FDI on stock market performance after instrumenting and controlling for several macro-economic variables. Second, we examine the moderating effect of democracy and FDI on the relationship between environmental quality and stock market performance. Our results show that (1) environmental performance leads to an increase in stock market performance regardless of the constitutional system, (2) the level of democracy can mitigate the detrimental effect of environmental degradation and improve the stock market performance sub-sequentially in a parliamentary system and (3) FDI facilitates the link between environmental performance and the stock market in a presidential system. The results slightly vary across sub-panels.

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市场对环境质量反应的全球视角:来自动态面板方法的证据

本文采用两步GMM模型，研究了2006年至2016年80个国家的议会制和总统制下环境质量对股市表现的影响，以及民主与外国直接投资(FDI)的互动效应。首先，在计量和控制几个宏观经济变量后，我们检验了环境质量、民主和外国直接投资对股市表现的直接影响。其次，我们考察了民主和外国直接投资对环境质量与股市绩效关系的调节作用。我们的研究结果表明:(1)无论宪政制度如何，环境绩效都会导致股市表现的提高;(2)议会制下，民主水平可以缓解环境退化的不利影响，进而改善股市表现;(3)总统制下，外商直接投资促进了环境绩效与股市之间的联系。不同子面板的结果略有不同。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Journal of Green Economics Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)

CiteScore

3.40

自引率

0.00%

发文量

期刊介绍： IJGE, a peer-reviewed international journal, proposes and fosters discussion on all aspects of Green Economics. It contributes to international research and practice in Green Economics with the aim of encouraging economic change and the positioning of Green Economics at the centre of the Economics disciplines. Green Economic theories and policies, tools, instruments and metrics are developed with the aim of offering practical and theoretical solutions and proposals to facilitate a change to the current economic models for the benefit of the widest number of people and the planet as a whole. IJGE focuses particularly on resource management, on meeting peoples’ needs and the impact and effects of international trends and how to increase social justice.