On Interaction of the Green Growth and Environmental Quality in ECOWAS: Environmental Regulation

Abstract

This paper explores the impact of environmental regulations on environmental quality and green growth, utilizing panel data from six ECOWAS economies. The study employs the CSD-PLS framework, incorporating the Dumitrescu-Hurlin’s panel test, covering the period from 2000 to 2020 with quarterly data. The regression model applied to panel data reveals an inverted U-shaped interaction between environmental regulation and environmental destruction in selected ECOWAS economies, indicating the presence of innovation compensation. Additionally, a U-shaped relationship is identified between environmental regulations and green growth, aligning with the Porter hypothesis. The findings suggest that effective environmental protection policies reduce environmental destruction and promote green growth in ECOWAS economies. Supportive environmental protection policies encourage enterprises to develop environmentally friendly technological and business innovations, which mitigates environmental pollutant emissions and energy consumption, fostering environmental sustainability and green growth.

Keywords

• Environmental Regulation
• Environment Quality
• Green Growth
• Technological Innovations