Green investment, institutional quality, and environmental performance: evidence from G-7 countries using panel NARDL approach

The foremost purpose of the study is to establish a point that an economy of G-7 countries has an abundance of resources to tackle the environmental changes that occur in the world, but these countries are still behind the line because in this modern era, environmental performance changes their shape, dimension, and nature very frequently and create a huge impact on globalization of world economy. To fill this gap, we use green investment, institutional quality, and economic growth on environmental performance for this, we use four proxies for green investment and three proxies for greenhouse gas, and we also use six proxies of institutional quality to do this using period of 1997 to 2021. Moreover, we have used the panel nonlinear autoregressive distributed lag method to evaluate the long-run and short-run asymmetric effects of green investment, institutional quality, and economic growth on greenhouse gas emissions. The findings of the study affirm that the positive change of green investment has a positive and significant relationship with environmental performance, while the negative change of green investment has a significant and positive influence with environmental performance in the long run. Furthermore, the outcomes demonstrate that the positive shock of institutional quality has a positive and significant relationship with environmental performance, while the negative shock of intuitional quality has a significant and positive association with environmental performance in the long run, whereas positive change in economic growth has a positive and significant with the environmental performance, while the negative change of economic growth has a positive effect with environmental performance in the long run. This study finds future precautions that institutional quality has to perform exceptionally and shows results very rapidly, while green investment with economic growth has also made a deadly combination to control greenhouse gas emission, so the role of G-7 countries is pretty clear and straight. Furthermore, it is suggested that governments and policymakers take a proactive stance to promote resource acquisition and investment across all industries. To reduce gas emissions, public interest might also be complementary to private ones. So, economic policymakers, specifically in G-7 countries, should consider strategies that support sustainable economic growth.