Trade Openness, Public Sector Corruption, and Environment: Data Analysis for Asian Developing Countries
Abstract
This study used panel OLS, fixed and random effects models to check the effect of trade openness and public sector corruption on the environment. Government effectiveness has been used as a measure of public sector corruption. CO2 and methane gas emissions are used as the measure of environmental degradation. Different specification tests, such as F-test andHausman specification test are used to make selection among ordinary least square, fixed effect and random effect model. Random effect model seems best to handle such a situation.In this study the random effect framework is the preferred model, but this study also presents the results from the fixed effects model for comparison purpose. The results of the random effect model are the main finding of this study which concluded that there is negative and significant effect of trade openness, government effectiveness on both CO2 and methane gasemissions. In this way the world trade openness has also brought to the fore the importance of regulation of government policies towards openness because results has already warned that government effectiveness is volatile and is expected to become more tense thus the strategy needs to identify aspects of government corruption which are hurting economies.Keywords: Environmental Pollution, Fixed and Random Effects Model, Openness to Trade, Public Sector Corruption, Pooled OLS.References
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