Essays On The Effects Of Urbanization,Rule Of Law And FDI On Environmental Pollution Across Belt And Road Initiative Countries

Climate change and global warming due to carbon emissions is considered as the biggest threat of 21st century.In the past several decades,world economy witnessed immense growth in developing countries.Economic growth uplifts the socio-economic condition of a country and bring modernization.However,modernization due to the economic growth and industrial revolution comes at the expense of environmental pollution.Which promote the demand of energy consumption and emit large amount of greenhouse gases（GHGs）particularly CO₂ emissions.International community became more and more interconnected due to rapid globalization,immense growth in technological advancement and economic integration process.As the world turn into a global village it became difficult for a single country to survive on its own without international cooperation and collaboration.Intergovernmental organizations help the member countries to facilitate trade,increase foreign direct investment（FDI）,define international policies,and resolve disputes and other.In recent time the approach of intergovernmental organization practices has increased worldwide,where countries joined together to make a block in order to achieve political and social-economic stability.One such step was taken by China in 2013,by initiating the project of Belt and Road initiative（BRI）,which aims to connect over 100 countries in a commercial and cultural link.BRI will help to improve the connectivity among countries,promote economic activities,trade and investment.However,all these activities might also effect environmental quality.Therefore,it is of great potential to explore the impact of difference CO₂emissions drivers,such as,urbanization,trade,FDI and economic growth on environmental pollution across belt and road countries.Furthermore,it is essential to measure the impact of Belt and Road initiative as a policy shock on the environmental efficiency of group countries.In this study,we set five objectives to analyze the drivers of carbon emissions across BRI countries.The first objective focused on the nonlinear relationship between carbon emissions and urbanization across belt and road countries across different income groups.The second objective is to analyze whether FDI has pollution halo or pollution haven effect across BRI countries on the basis of income level.Third,objective is to analyze the behavior of export and import on carbon emissions.Fourth objective,study the impact of different institutional factors such as,political stability,corruption control and rule of law on carbon emissions across different income groups in BRI countries.The fifth objective was to analyze the effect of belt and road initiative as a policy shock on the environmental efficiency of belt and road countries.The first three objective of the study were accomplished using 65 BRI countries from 2000 to2016.Quantile regressions is employed as basic regressions technique and FMOLS and DOLS is used as robust estimators.While,2SLS is employed to handle the issue of endogeneity.The results confirmed nonlinear relationship between urbanization and CO₂ only in high income group.EKC hypothesis is confirmed only in upper middle and high income countries.FDI increase pollution across BRI countries,irrespective of development level.While,Export and import shows a heterogeneous effect across different income groups.The fourth objective of this study was accomplished by examining the link between institutional elements and carbon emission across different income levels by using three institutional variables,such as.,political stability,corruption control and rule of law.Panel data of65 BRI countries with a time series of 2000-2016 was employed.IV-GMM estimation was used to tackle the endogeneity,while FMOLS and DOLS estimations are employed as robust tests.The result indicated that all institutional variables such as political stability,corruption control and rule of law are critical for CO₂ emission reduction.However,only political stability may not be enough to decrease emission without strong rule of law and corruption reduction.The last objective of this study was accomplished by analyzing the impact of belt and road initiative on the environmental efficiency of BRI countries.The analysis utilized 85 countries and divided them into 3 groups based on income level i.e.,low,middle and high income countries.Meta-frontier DDF analysis was employed to measure the efficiency.While,DID（difference-in-difference）estimation was used to measure the effect of BRI on environmental efficiency.The results further shows that,Belt and road initiative increase economic growth,promote FDI and create employment opportunities in BRI countries.