Governance Quality, Sustainability Accounting and Environmental Accountability: A Panel Data Analysis of Environmental Degradation in Developing Economies
Article Sidebar
Main Article Content
Abstract
This study examines the impact of governance quality on environmental degradation using panel data from 75 developing countries (1996-2020). It finds that stronger governance significantly reduces carbon dioxide emissions through enhanced accountability, disclosure credibility, and enforcement of sustainability reporting standards. The study advances sustainability accounting and governance theory by articulating accountability and disclosure assurance as mechanisms linking governance quality to environmental outcomes, with implications for both theory and practice in environmental and sustainability reporting.
Article Details
Section
This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
References
1. Abbas, S., Kousar, S., Yaseen, M., Mayo, Z. A., Zainab, M., Mahmood, M. J., & Raza, H. (2020). Impact assessment of socioeconomic factors on dimensions of environmental degradation in Pakistan. SN Applied Sciences, 2(3), 1-16.
2. Asongu, S. A., & Odhiambo, N. M. (2019). Inclusive development in environmental sustainability in sub‐Saharan Africa: Insights from governance mechanisms. Sustainable Development, 27(4), 713-724.
3. Baloch, M. A., Mahmood, N., & Zhang, J. W. (2019). Effect of natural resources, renewable energy and economic development on CO2 emissions in BRICS countries. Science of the Total Environment, 678, 632-638.
4. Barbieri, L. (2009). Panel unit root tests under cross-sectional dependence: An overview. Journal of Statistics: Advances in Theory and Applications, 1(2), 117-158.
5. Bumpus, A. G., & Liverman, D. M. (2008). Accumulation by decarbonization and the governance of carbon offsets. Economic geography, 84(2), 127-155.
6. Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of economics and statistics, 80(4), 549-560.
7. Gani, A. (2012). The relationship between good governance and carbon dioxide emissions: evidence from developing economies. Journal of Economic Development, 37(1), 77.
8. Halkos, G. E., & Tzeremes, N. G. (2013). Carbon dioxide emissions and governance: a nonparametric analysis for the G-20. Energy Economics, 40, 110-118.
9. Haseeb, M., Hassan, S., Azam, M., & Suryanto, T. (2018). The dynamics of governance, tourism and environmental degradation: the world evidence. International Journal of Global Environmental Issues, 17(4), 340-363.
10. Hurlin, C., & Mignon, V. (2007). Second generation panel unit root tests.
11. Hussain, M. S., Nawaz, M. A., Ahmad, T. I., & Bhatti, M. A. (2021). Environmental Governance and Green Energy: An Administrative Toolkit to Reduce Environmental Degradation. iRASD Journal of Management, 3(3), 329-338.
12. Intergovernmental Panel on Climate Change (Report on October 18, 2018; September, 2019)
13. Jordan, A., Wurzel, R. K., & Zito, A. R. (2003). 'New' instruments of environmental governance: Patterns and pathways of change.
14. Kao, C., & Chiang, M. H. (2001). On the estimation and inference of a cointegrated regression in panel data. In Nonstationary panels, panel cointegration, and dynamic panels. Emerald Group Publishing Limited. Bingley. Vol. 15, pp. 179-222. https://doi.org/10.1016/S0731-9053(00)15007-8
15. Karim, A. E., Albitar, K., &Elmarzouky, M. (2021). A novel measure of corporate carbon emission disclosure, the effect of capital expenditures and corporate governance. Journal of Environmental Management, 290, 112581.
16. Kousar, S., Ahmed, F., López García, M. D. L. N., & Ashraf, N. (2020). Renewable energy consumption, water crises, and environmental degradation with moderating role of governance: Dynamic panel analysis under cross-sectional dependence. Sustainability, 12(24), 10308.
17. Larrinaga, C. (2014). Carbon accounting and carbon governance. Social and Environmental Accountability Journal, 34(1), 1-5.
18. Liu, T., Wang, Y., Song, Q., & Qi, Y. (2018). Low-carbon governance in China–Case study of low carbon industry park pilot. Journal of Cleaner Production, 174, 837-846.
19. Lovell, H. C. (2010). Governing the carbon offset market. Wiley Interdisciplinary Reviews: Climate Change, 1(3), 353-362.
20. Milledge, S., Gelvas, I. & Ahrends, A. (2007). Forestry, governance and national development: lessons learned from a logging boom in Southern Tanzania, IUCN: International Union for Conservation of Nature. Retrieved from https://policycommons.net/artifacts/1375933/forestry-governance-and-national-development/1990194/ on 18 Aug 2022. CID: 20.500.12592/bs965j.
21. Mineur, E. (2007). Towards Sustainable Development: Indicators as a tool of local governance (Doctoral dissertation, Statsvetenskap).
22. Okudo, A. G. (2021). Corporate governance and carbon disclosure practices of quoted manufacturing firms in Nigeria. International Journal of Contemporary Research and Review, 12(07), 20409-20419.
23. Samargandi, N., Fidrmuc, J., & Ghosh, S. (2015). Is the relationship between financial development and economic growth monotonic? Evidence from a sample of middle-income countries. World development, 68, 66-81.
24. Samimi, A. J., Ahmadpour, M., & Ghaderi, S. (2012). Governance and environmental degradation in MENA region. Procedia-Social and Behavioral Sciences, 62, 503-507.
25. Sarwar, S., & Alsaggaf, M. I. (2021). The role of governance indicators to minimize the carbon emission: a study of Saudi Arabia. Management of Environmental Quality: An International Journal.
26. Sethi, N., & Dash, D. P. (2022). A Perspective on Energy Consumption Balance: Quality of Life, Governance, and Carbon Emissions in APEC. Energy RESEARCH LETTERS, 3(Early View), 32621.
27. Sharif, A., Raza, S. A., Ozturk, I., & Afshan, S. (2019). The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: a global study with the application of heterogeneous panel estimations. Renewable energy, 133, 685-691.
28. Solikhah, B., Wahyuningrum, I. F. S., Yulianto, A., Sarwono, E., &Widiatami, A. K. (2021). Carbon emission report: a review based on environmental performance, company age and corporate governance. In IOP Conference Series: Earth and Environmental Science (Vol. 623, No. 1, p. 012042). IOP Publishing.
29. Walker, G. (2011). The role for ‘community’in carbon governance. Wiley interdisciplinary reviews: climate change, 2(5), 777-782.
30. Wang, N., & Chang, Y. C. (2014). The development of policy instruments in supporting low-carbon governance in China. Renewable and Sustainable Energy Reviews, 35, 126-135.
31. Yang, Y., & Khan, A. (2021). Exploring the role of finance, natural resources, and governance on the environment and economic growth in South Asian countries. Environmental Science and Pollution Research, 28(36), 50447-50461.
32. Liu, X., Latif, K., Latif, Z., & Li, N. (2020). Relationship between economic growth and CO2 emissions: does governance matter? Environmental Science and Pollution Research, 27(14), 17221-17228.
33. Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
34. Christopoulos, D. K., & Tsionas, E. G. (2004). Financial development and economic growth: evidence from panel unit root and cointegration tests. Journal of development Economics, 73(1), 55-74.
35. Kazmi, R., Sajjad, S. K., Askari, S. F., & Rizvi, A. A. (2025). An analytical study of the non-performing asset (NPA) issue in Punjab National Bank: A pre-pandemic study. South Asian Journal of Social Studies and Economics, 22(6), 158–169. https://doi.org/10.9734/sajsse/2025/v22i61045
36. (HAL-05100435)
37. Kazmi, R., Sajjad, S. K., Askari Afser Rizvi, S. F., & Sajjad, S. K. (2025). Impact of shadow economy on Indian economy: Unraveling the problems and pitfalls. Empirical Economics Letters, 24(August Special Issue 2), 233–251. https://doi.org/10.5281/zenodo.16951109