Environmental pollution, economic growth and institutional quality: exploring the nexus in Nigeria

Abstract

Purpose Interaction between environmental pollution and economic growth determines the achievement of the green growth objective of developing economies. An economy turns around the inverted U-shaped environmental Kuznets curve (EKC) when pollution is effectively dampened by social, political and economic factors as such economy grows. Thus, the purpose of this paper is to examine the EKC considering the impact of institutional quality on six variables of environmental pollution (carbon dioxide (CO2), nitrous oxide (N2O), suspended particulate matters (SPM), rainfall, temperature and total greenhouse emission (TGH)) using the case of Nigeria. Design/methodology/approach The EKC model includes population density, education expenditure, foreign direct investment and gross domestic investment as control variables, and it was analysed using the autoregressive distribution lag (ARDL) econometric technique, which has not been applied in the literature on Nigeria. Findings The results, inter alia, indicate that there is EKC for CO2 and SPM. This implies that the green growth objective can be pursued in Nigeria with concerted efforts. Other environmental pollution indicators did not exert significant influence on economic growth. Practical implications Therefore, it is recommended that Nigeria’s institutional quality be strengthened to limit environmental pollution in light of economic growth. Originality/value Previous studies are yet to apply a more developed econometric method, like the ARDL, to estimate the EKC model for Nigeria. This study fills this observed knowledge gap.