Investigating the effects of natural resources and institutional quality on CO₂ emissions during globalization mode in developing countries

Despite their economic success, most developing economies have yet to accomplish environmental sustainability. In contrast, these economies will not be able to preserve their trade and industry development if they do not preserve the substance level of the natural environment. In this view, the main purpose of this study is to explore the effect of the natural resources and institutional quality on carbon emissions during globalization mode using two-stage least square and panel threshold methods for a global panel of 73 developing nations from 1990 to 2018. This study also executes these empirical models for three sub-panel regions: Asia, Africa, and Latin America. The study findings suggest that natural resources, globalization, institutional quality, and human capital adversely impact carbon dioxide emission, while foreign investment and energy utilization can increase emission levels. In this respect, the panel threshold test finds that developing economies with natural resources below a threshold of 3.0315 points could increase environmental pollution. This study highlights the moderation effect between institutional quality and natural resources on carbon emissions. The other study findings show the presence of both the environmental Kuznets curve and pollution haven hypothesis for all countries. Further, robustness tests conform to our typical results. This study finding has policy implications for policymakers, and governments in the mentioned countries and regions.