Institutional quality and environmental sustainability: The role of freedom of press in most freedom of press countries

Abstract

Despite the fact that there are several attempts in the literature of environmental economics to identify the key determinants of environmental degradation particularly CO2 emissions, little attention has been given to institutional factors, especially the influence of freedom of press has not been scrutinized. This study therefore is undertaking to close the gap and examine the impact of freedom of the press on CO2 emissions. The study draws data from 10 countries indexed as the most freedom of press countries from 1993‐ to 2016 due to the availability of data on freedom of press and examines it using the technique of pooled mean group (PMG) belonging to the panel autoregressive distributed lag model. The study further applies the second generation techniques of cross-sectional dependence test, Westerlund cointegration-ECM test to account for cross-sectional dependence of the panel. The main finding of the study indicates that freedom of the press has the capacity to reduce CO2 emissions in most freedom of press countries. In addition, the result confirms the existence of an inverted U-shaped curve between CO2 emissions and per capita GDP, validating the environmental Kuznets curve (EKC) hypothesis. Energy use and foreign direct investment as control variables contribute to rising CO2 emissions in most freedom of press countries. In this regards, the study recommends that freedom of the press should be improved upon through the channel of institutional quality, symmetry, efficiency and reputation effects in order to reduce the incidence of CO2 emissions.