(A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS, VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS)
By Nguyen Thai Duong (VNP 20)
Academic Supervisor: Dr. Pham Khanh Nam
This research investigates the direct and indirect effects of corruption which measured by corruption perception index on carbon dioxide emissions. Using data from 42 Asian countries and applying three-stage least squares (3SLS) method with considering corruption as endogenous variable, the finding indicates both effects are positive implying that countries should reduce their corruption levels to lower poison gas emission. Although these effects are not clear when we control for fixed effects using countries dummies, these are significant when we use Asian sub-regions dummy instead. In addition, we also find that capital per worker and human capital possess positive relationships with economic growth while the share of export and import in GDP positively affects carbon dioxide emission.
Keywords: Corruption, economic growth, environment, carbon dioxide, Asian countries, three-stage least squares, endogeneity
Abbreviations: 2SLS - Two-stage least squares; 3SLS - Three-stage least squares; CO2 - Carbon dioxide; CPI - Corruption Perception Index; EDGAR - Emissions Database for Global Atmospheric Research; EKC - Environmental Kuznets Curve; GDP – Gross domestic product; GFK - Gross Fixed Capital Formation; RF - Radiative forcing
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