Climate change, governance, and economic growth in Asia: a panel cointegration analysis

Abstract

Asian economies are extremely vulnerable to climate due to rapid economic progress, poor governance structure and governmental performance. Keeping in view the fragility of Asia economies in context of environmental deterioration, we examine the role of climate change in shaping economic progress based on an extensive dataset of 47 Asia economies over the period of 2010–2020 through advance panel estimation models such as FMOLS and DOLS for long-run relationships, and panel-VECM for granger causality. The finding suggests a long run positive impact of climate change on economic progress. Further, the results also support the bi-directional relationship between climate change and economic development in Asia region. Hence, the current research suggest that proper policies should be warranted to balance government effectiveness for the increased implementation of environmental regulations and economic prosperity to meet the needs of society and maintain environmental sustainability in the long run.