The Role of Corruption Control and Financial Markets in Advancing Green Economy Transitions: An Empirical Analysis of CO2 Emissions in Emerging Economies

Abstract

This study evaluates the impact of corruption control and financial markets on CO₂ emissions, including per capita emissions, in emerging economies, contributing to the green transition. Utilizing panel data from 28 emerging economies spanning 2003 to 2020, the research employs a GMM regression model to examine these effects.Findings reveal that financial market consistently correlates with higher CO₂ emissions, suggesting that economic expansion driven by financial growth can exacerbate environmental challenges if sustainability measures are not integrated.The effect of corruption control on emissions is more complex and context-dependent;while stronger anti-corruption measures are linked to increased emissions in some cases, this effect diminishes when considering governance quality factors such as accountability.Robustness checks affirm the stability of these findings, highlighting the intricate interplay between governance, financial markets, and environmental outcomes.This study contributes to the literature by providing new empirical evidence on the dynamic relationships among governance, financial markets, and environmental sustainability in emerging economies, underscoring the importance of targeted governance reforms and sustainable financial practices in mitigating climate change and promoting a green economy transition.