This study investigates the determinants of green growth in ASEAN-6 countries through the lens of institutional theory, addressing critical research gaps regarding the moderating role of institutional quality in environmental governance. While existing literature examines green growth determinants broadly, limited attention has been paid to how institutional frameworks moderate these relationships, particularly in rapidly developing Asian economies.
The research employs panel data from the World Bank spanning 2000–2021, utilising fixed effects ordinary least squares and dynamic ordinary least squares models. This methodological approach incorporates cross-sectional dependence and cointegration tests to ensure robust econometric analysis, advancing beyond traditional panel estimation techniques in existing studies.
The analysis reveals that while trade openness and institutional quality positively influence green growth, foreign direct investment, financial development, industrialisation, natural resources and technological innovation demonstrate inverse relationships. Institutional quality exhibits significant but varied moderating effects, enhancing the environmental benefits of industrialisation and natural resource management while constraining the positive impacts of trade openness and financial development.
This research advances theoretical understanding of institutional quality’s role in environmental governance by introducing a novel framework for analysing its moderating effects on green growth determinants. By focusing specifically on ASEAN-6 and employing post–Paris Agreement data, the study provides unique insights into how institutional frameworks influence environmental outcomes in emerging economies, offering crucial implications for policy development in the region’s transition towards sustainable development.
The peer-review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2025-0093
