Impact of Institutional Quality on Carbon Emission Efficiency in European and Asian Countries

The purpose of this study is to assess the impact of institutional quality on carbon emission efficiency in European and Asian countries. The study is conducted with a sample of 64 European developed and Asian developing countries over the period from 2002 to 2019. The generalized least square method is used and the findings show that the aggregate level of institutional quality and its six dimensions including control of corruption, government effectiveness, political stability and absence of violence, regulatory quality, rule of law, and voice and accountability have a beneficial impact in the reduction of carbon emissions in all countries. By region, the impact of institutional quality on carbon emission efficiency is stronger in European developed countries than in Asian developing countries. To enhance carbon emission efficiency, in European countries, more effort should be placed on the improvement of voice and accountability, regulatory quality, and governance effectiveness while in Asian countries, control of corruption, regulatory quality, and governance effectiveness should deserve more attention.