Does Institutional Quality Improve Environmental Quality? New Evidence from NARDL Approach

Abstract

The current research intends to look at the asymmetrical influence of institutional quality (IQ) on carbon emissions (????????2e) by incorporating additional variables i.e., trade openness (TO), population growth (PG), and energy use (E) over the period 1980-2020. The current study used nonlinear ARDL to demonstrate the nonlinear influence of IQ on ????????2e. The empirical finding suggests that positive fluctuation in institutional quality considerably improves the environmental quality in Pakistan in the short and long run. At the same time, the outcomes show that negative fluctuations in IQ lead to considerably contributed to ????????2e in long run. GDP and E are positively connected with ????????2e. The policy makers could need to enhance the institutional quality leads to attaining the long-term ecological objectives.