UNVEILING THE INSTITUTIONAL FOUNDATIONS OF GREEN GROWTH: THE ROLE OF CORRUPTION CONTROL IN A GLOBAL DYNAMIC PANEL FRAMEWORK

Abstract

This study investigates how corruption mechanisms impact green growth strategies that manage environmental costs through the study of global panel data from 141 countries from 1996 to 2024. The study employs static and dynamic panel estimation techniques, including autoregressive distributed lag and System Generalized Method of Moments models to investigate corruption mechanisms, which show both short-term and long-term effects while handling endogeneity, unobserved heterogeneity, and persistence. The static results show that corruption mechanisms bring within-country advantages that help countries develop their green economic growth strategies, which create better environmental results through institutional quality improvements. The primary obstacle to environmental progress stems from structural economic limitations, which produce significant adverse effects on poverty reduction efforts. The relationship remains sensitive to model specifications, implying that complementary institutional and policy frameworks are necessary to achieve sustainable green growth. Different models produce mixed or weak statistical findings about trade openness and foreign direct investment because their results vary between different models. The researchers employ lagged institutional models together with autoregressive distributed lag panel specifications to analyze dynamic institutional changes that bring delayed effects. The models show that the green growth process maintains partial persistence while establishing different institutional effects for short-term and long-term periods. The short-run effects of corruption appear weak in statistical analysis because endogeneity emerges from reverse causality and omitted structural factors. The System Generalized Method of Moments estimator extends the analysis through its ability to correct dynamic panel bias and simultaneity problems by using internal instrumentation. The dynamic results demonstrate that corruption control plays a vital role in fostering green economic growth because endogeneity has been effectively resolved. The findings show that green economic growth depends on institutional quality and structural economic conditions, which require governance reforms and complete policy frameworks to achieve environmental sustainability.

Keywords: Green Economic Growth, Governance Quality, Corruption Mechanism, Panel Data Analysis, Sustainable Development