Table 6 The threshold level of...

Table 6

The threshold level of institutional quality dimensions that trigger a significant impact of environmental tax on trade development

Variables	(11) Political stability		(12) Government effectiveness		(13) Control of corruption		(14) Rule of law		(15) Regulatory quality
Variables	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime
Trade development = Lag	0.471***	7.67***	0.619***	8.87***	0.651***	9.593**	0.489***	4.56***	0.557***	6.670***
Trade development = Lag	(0.0430)	(1.02)	(0.0429)	(1.071)	(0.0585)	(4.874)	(0.0746)	(0.508)	(0.0890)	(1.389)
Environmental tax	−10.01	20.34**	−5.467**	4.921***	−1.991**	2.580***	−1.672	5.971***	−22.69**	23.39**
Environmental tax	(6.971)	(10.27)	(1.48)	(1.50)	(0.686)	(0.046)	(1.286)	(2.710)	9.60)	(9.222)
Carbon emission (CO₂)	−5.401**	−20.49**	−66.97***	67.81***	63.85	−63.69	−3.668	7.063***	−2.749*	12.39**
Carbon emission (CO₂)	(1.50)	(5.45)	(17.01)	(11.40)	(85.26)	(89.71)	(8.44)	(2.81)	(1.84)	(6.17)
Energy usage	−101.8*	43.51***	−315.2***	254.3***	−106.6***	−17.19	−40.97*	91.2***	77.82***	−70.2***
Energy usage	(45.95)	(14.02)	(59.9)	(50.9)	(32.6)	(35.8)	(18.6)	(18.3)	(13.3)	(22.5)
Foreign direct investment	−0.146	0.561**	−0.571	0.644**	−0.505***	0.626***	0.0265	−0.211	−0.143	0.226
Foreign direct investment	(0.235)	(0.225)	(0.552)	(0.241)	(0.136)	(0.142)	(0.166)	(0.560)	(0.153)	(0.509)
Agricultural growth	−0.534	0.306	−2.007	1.729	−0.126	0.183	−0.611	0.119	−0.492	0.406
Agricultural growth	(0.462)	(0.514)	(1.476)	(1.730)	(2.402)	(2.338)	(0.545)	(0.753)	(0.918)	(0.447)
GDP growth	0.129	0.388	−1.281*	2.103**	−2.512*	−2.349**	−0.559*	0.601***	0.00491	0.464***
GDP growth	(0.243)	(0.311)	(0.773)	(0.800)	(1.372)	(0.842)	(0.261)	(0.181)	(0.136)	(0.126)
cons_<	−27.88		−490.7		284.7		1,278**		683.0**
cons_<	(183.0)		(1,010)		(1,098)		(509.2)		(344.7)
Threshold (r)	3.296***		−1.400***		−1.375***		−1.283***		−1.066***
Threshold (r)	(0.463)		(0.167)		(0.137)		(0.173)		(0.179)
Kink slope	16.9***		−33.41***		−10.61***		−21.72***		11.10***
Kink slope	(1.272)		(5.22)		(2.484)		(5.057)		(3.641)
Countries	25		25		25		25		25

Variables	(11)Political stability		(12)Government effectiveness		(13)Control of corruption		(14)Rule of law		(15)Regulatory quality
Variables	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime	Lower regime	Upper regime
Trade development = Lag	0.471***	7.67***	0.619***	8.87***	0.651***	9.593**	0.489***	4.56***	0.557***	6.670***
Trade development = Lag	(0.0430)	(1.02)	(0.0429)	(1.071)	(0.0585)	(4.874)	(0.0746)	(0.508)	(0.0890)	(1.389)
Environmental tax	−10.01	20.34**	−5.467**	4.921***	−1.991**	2.580***	−1.672	5.971***	−22.69**	23.39**
Environmental tax	(6.971)	(10.27)	(1.48)	(1.50)	(0.686)	(0.046)	(1.286)	(2.710)	9.60)	(9.222)
Carbon emission (CO₂)	−5.401**	−20.49**	−66.97***	67.81***	63.85	−63.69	−3.668	7.063***	−2.749*	12.39**
Carbon emission (CO₂)	(1.50)	(5.45)	(17.01)	(11.40)	(85.26)	(89.71)	(8.44)	(2.81)	(1.84)	(6.17)
Energy usage	−101.8*	43.51***	−315.2***	254.3***	−106.6***	−17.19	−40.97*	91.2***	77.82***	−70.2***
Energy usage	(45.95)	(14.02)	(59.9)	(50.9)	(32.6)	(35.8)	(18.6)	(18.3)	(13.3)	(22.5)
Foreign direct investment	−0.146	0.561**	−0.571	0.644**	−0.505***	0.626***	0.0265	−0.211	−0.143	0.226
Foreign direct investment	(0.235)	(0.225)	(0.552)	(0.241)	(0.136)	(0.142)	(0.166)	(0.560)	(0.153)	(0.509)
Agricultural growth	−0.534	0.306	−2.007	1.729	−0.126	0.183	−0.611	0.119	−0.492	0.406
Agricultural growth	(0.462)	(0.514)	(1.476)	(1.730)	(2.402)	(2.338)	(0.545)	(0.753)	(0.918)	(0.447)
GDP growth	0.129	0.388	−1.281*	2.103**	−2.512*	−2.349**	−0.559*	0.601***	0.00491	0.464***
GDP growth	(0.243)	(0.311)	(0.773)	(0.800)	(1.372)	(0.842)	(0.261)	(0.181)	(0.136)	(0.126)
cons_<	−27.88		−490.7		284.7		1,278**		683.0**
cons_<	(183.0)		(1,010)		(1,098)		(509.2)		(344.7)
Threshold (r)	3.296***		−1.400***		−1.375***		−1.283***		−1.066***
Threshold (r)	(0.463)		(0.167)		(0.137)		(0.173)		(0.179)
Kink slope	16.9***		−33.41***		−10.61***		−21.72***		11.10***
Kink slope	(1.272)		(5.22)		(2.484)		(5.057)		(3.641)
Countries	25		25		25		25		25

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

Threshold estimation based on grid_num (50), trim_rate (0.1), boost (100)

Dependent variable is trade development; threshold variables are dimensions of institutional quality [Political stability –(11); Government effectiveness –(12); Control of corruption – (13); Rule of law – (14); Regulatory quality – (15)

Source(s): Authors’ compilation, 2025

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