Economic and institutional determinants of environmental health and sustainability: Spatial and nonlinear effects for a panel of worldwide countries

Abstract

Research background: This study identifies the key factors influencing environmental health across a global panel of countries, focusing on protection from environmental hazards, as informed by the existing literature, while also shedding light on novel aspects of these causal relationships. Purpose of the article: This study aims to reveal, through a comprehensive review of the relevant literature, the underexplored phenomena of spatial diffusion and contagion of national environmental behaviors and the nonlinear dynamics between environmental performance and its determinants, acknowledging the significant diversity in the characteristics and behaviors of the countries studied. Methods: Spatial analysis and econometric methods, including spatial panel regression alongside dynamic panel models using threshold techniques, were employed to meet the study’s objectives. Findings & value added: This study’s major finding is that environmental performance across nations shows significant clustering influenced by economic and institutional factors. This clustering effect arises from spatial contagion and diffusion processes, as evidenced by spatial panel regression analysis. Furthermore, this study demonstrates that variations in environmental behavior can be attributed to differing levels of development and specific internal conditions within countries. Notably, a country’s gross domestic product and the proportion of industries in its economy have a substantial effect on its environmental health practices, establishing distinct impact thresholds. This research enriches academic dialogue by illustrating, through these thresholds, that in less developed countries, an increased industrial share leads to environmental degradation. Moreover, the influence of the other examined factors varied depending on the category of the country under review, highlighting the nuanced effects of economic and institutional variables on environmental outcomes.