Threshold Effects of Institutional Quality on the Relationship Between the Sustainable Energy Policy Index and Socioeconomic Development with Ecological Footprint in Selected Developing and Developed Countries
Keywords:
Institutional quality, Sustainable energy policy index, Socio-economic development, Ecological footprint, Developing countriesAbstract
This study examines the threshold effects of institutional quality on the relationship between the Sustainable Energy Policy Index and socioeconomic development with the ecological footprint in selected developing (D8) and developed (G7) countries over the period 2000–2023. The research model is estimated using panel data and the Panel Smooth Transition Regression (PSTR) approach to analyze the nonlinear effects of the Sustainable Energy Policy Index and socioeconomic development on the ecological footprint under the influence of institutional quality. The ecological footprint is calculated based on greenhouse gas emissions, including CO₂, CH₄, and N₂O. The variables URB, FDI, SD, L, NRS, RENE, GOV, and CAP are considered as explanatory variables in the model. The results of the unit root and cointegration tests indicate that all variables are stationary and that a long-run relationship exists among them. Diagnostic tests for model selection also confirm the appropriateness of the panel data approach. The analysis of the linearity hypothesis reveals that the relationship among variables is nonlinear, and a single transition function is sufficient for the PSTR model. The estimation results for developing countries show that urban population and foreign direct investment have a positive and significant effect on increasing the ecological footprint, while socioeconomic development and the Sustainable Energy Policy Index have a negative and mitigating effect on it. Additionally, natural resource abundance and labor force participation rate exhibit a positive and significant impact on increasing the ecological footprint. These findings highlight the critical role of institutional quality in moderating the effects of sustainable energy policies and socioeconomic development on the environment, suggesting that effective policies for reducing the ecological footprint require careful consideration of institutional structures and an appropriate balance between economic development and sustainable energy.
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Copyright (c) 2026 Jalaloddin Boloori (Author); Marjan Daman Keshedeh; Narsis Amin Rashti, Azadeh Mehrabian (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
