Table 5 The role of institutional...

Table 5

The role of institutional quality on environmental tax and trade development

Variables	(6)	(7)	(8)	(9)	(10)
Variables	Trade	Trade	Trade	Trade	Trade
I. Trade = L,	0.902***	0.844***	0.865***	0.867***	0.836***
I. Trade = L,	(0.0306)	(0.0420)	(0.0273)	(0.0293)	(0.0320)
Environmental tax	−3.933***	−2.271***	−1.354***	−1.015***	−1.705*
Environmental tax	(0.116)	(0.289)	(0.193)	(0.040)	(0.965)
Political stability	0.722***
Political stability	(0.613)
Government effectiveness		3.176***
Government effectiveness		(0.191)
Control of corruption			2.610***
Control of corruption			(0.430)
Rule of law				1.844***
Rule of law				(0.174)
Regulatory quality					5.172*
Regulatory quality					(1.778)
Carbon emission (CO₂)	−0.273	−1.603*	−1.006***	−0.793	−0.485
Carbon emission (CO₂)	(1.523)	(0.739)	(0.293)	(1.347)	(0.904)
Energy usage	−1.937	1.429***	1.102***	0.930	5.429**
Energy usage	(2.024)	(0.169)	(0.174)	(2.948)	(2.013)
Foreign direct investment	0.287***	0.330***	0.338***	0.304***	0.351***
Foreign direct investment	(0.0533)	(0.0609)	(0.0419)	(0.0492)	(0.0614)
Agricultural growth	−0.0740*	−0.147**	−0.141***	−0.125**	−0.143***
Agricultural growth	(0.0404)	(0.0640)	(0.0419)	(0.0453)	(0.0429)
GDP growth	0.352***	0.393***	0.392***	0.399***	0.392***
GDP growth	(0.0596)	(0.0512)	(0.0790)	(0.0714)	(0.0657)
Pol. Stability *Environmental Tax	5.169***
Pol. Stability *Environmental Tax	(1.829)
Govt. Effective*Environmental Tax		7.630***
Govt. Effective*Environmental Tax		(2.027)
Con. Corruption*Environmental Tax			−6.392***
Con. Corruption*Environmental Tax			(2.345)
Rule of Law* Environmental Tax				4.483***
Rule of Law* Environmental Tax				(1.903)
Reg. Quality*Environmental Tax					4.363***
Reg. Quality*Environmental Tax					(0.926)
Total effect ( $β_{1} * β_{2} * β_{3}$ )	5.169**	8.535***	−5.136**	5.312**	7.830***
Total effect ( $β_{1} * β_{2} * β_{3}$ )	(2.326)	(1.929)	(2.108)	(2.037)	(2.739)
Marginal effect	17.945***	−1.913	6.253***	4.349***	2.833***
$β_{2} + β_{3}$ *Institutional quality	(6.707)	(0.161)	(1.767)	(1.221)	(1.281)
Constant	5.636**	3.287*	1.874**	2.315*	−12.28***
Constant	(2.672)	(1.268)	(0.786)	(1.529)	(6.19)
AR1	0.006	0.008	0.009	0.008	0.009
AR2	0.157	0.168	0.173	0.165	0.107
Sargan test	0.636	0.498	0.517	0.384	0.511
Hansen test	0.736	0.869	0.631	0.647	0.606
Country effect	Yes	Yes	Yes	Yes	Yes
Time effect	Yes	Yes	Yes	Yes	Yes
Observations	375	375	375	375	375
Number of countries	25	25	25	25	25

Variables	(6)	(7)	(8)	(9)	(10)
Variables	Trade	Trade	Trade	Trade	Trade
I. Trade = L,	0.902***	0.844***	0.865***	0.867***	0.836***
I. Trade = L,	(0.0306)	(0.0420)	(0.0273)	(0.0293)	(0.0320)
Environmental tax	−3.933***	−2.271***	−1.354***	−1.015***	−1.705*
Environmental tax	(0.116)	(0.289)	(0.193)	(0.040)	(0.965)
Political stability	0.722***
Political stability	(0.613)
Government effectiveness		3.176***
Government effectiveness		(0.191)
Control of corruption			2.610***
Control of corruption			(0.430)
Rule of law				1.844***
Rule of law				(0.174)
Regulatory quality					5.172*
Regulatory quality					(1.778)
Carbon emission (CO₂)	−0.273	−1.603*	−1.006***	−0.793	−0.485
Carbon emission (CO₂)	(1.523)	(0.739)	(0.293)	(1.347)	(0.904)
Energy usage	−1.937	1.429***	1.102***	0.930	5.429**
Energy usage	(2.024)	(0.169)	(0.174)	(2.948)	(2.013)
Foreign direct investment	0.287***	0.330***	0.338***	0.304***	0.351***
Foreign direct investment	(0.0533)	(0.0609)	(0.0419)	(0.0492)	(0.0614)
Agricultural growth	−0.0740*	−0.147**	−0.141***	−0.125**	−0.143***
Agricultural growth	(0.0404)	(0.0640)	(0.0419)	(0.0453)	(0.0429)
GDP growth	0.352***	0.393***	0.392***	0.399***	0.392***
GDP growth	(0.0596)	(0.0512)	(0.0790)	(0.0714)	(0.0657)
Pol. Stability *Environmental Tax	5.169***
Pol. Stability *Environmental Tax	(1.829)
Govt. Effective*Environmental Tax		7.630***
Govt. Effective*Environmental Tax		(2.027)
Con. Corruption*Environmental Tax			−6.392***
Con. Corruption*Environmental Tax			(2.345)
Rule of Law* Environmental Tax				4.483***
Rule of Law* Environmental Tax				(1.903)
Reg. Quality*Environmental Tax					4.363***
Reg. Quality*Environmental Tax					(0.926)
Total effect ( $β_{1} * β_{2} * β_{3}$ )	5.169**	8.535***	−5.136**	5.312**	7.830***
Total effect ( $β_{1} * β_{2} * β_{3}$ )	(2.326)	(1.929)	(2.108)	(2.037)	(2.739)
Marginal effect	17.945***	−1.913	6.253***	4.349***	2.833***
$β_{2} + β_{3}$ *Institutional quality	(6.707)	(0.161)	(1.767)	(1.221)	(1.281)
Constant	5.636**	3.287*	1.874**	2.315*	−12.28***
Constant	(2.672)	(1.268)	(0.786)	(1.529)	(6.19)
AR1	0.006	0.008	0.009	0.008	0.009
AR2	0.157	0.168	0.173	0.165	0.107
Sargan test	0.636	0.498	0.517	0.384	0.511
Hansen test	0.736	0.869	0.631	0.647	0.606
Country effect	Yes	Yes	Yes	Yes	Yes
Time effect	Yes	Yes	Yes	Yes	Yes
Observations	375	375	375	375	375
Number of countries	25	25	25	25	25

Note(s): Standard errors in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1

Source(s): Authors’ compilation, 2025

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