The Role of Environmental Quality, Financial Development and Institutional Quality in Sustainable Economic Growth: Evidence from China
The Role of Environmental Quality, Financial Development and Institutional Quality in Sustainable Economic Growth: Evidence from China

Summary/Abstract: China's robust economic growth serves as a key driver propelling the global economy forward. As such, under-standing the factors influencing its sustainable economic growth remains a critical concern for stakeholders.In this context, this study aims to investigate the key determinants of China's sustainable economic growth.Specifically, it examines the effect of environmental quality, institutional quality and financial developmenton sustainability in the Chinese context. To achieve this, the study employs a range of econometric analyses,including Ordinary Least Square (OLS), Generalized Method of Moments (GMM), and Quantile Regression (QR),using data spanning 2002 to 2019. The empirical findings reveal that environmental quality, institutional qual-ity and financial development significantly contribute to China's sustainable economic growth. Additionally,the interaction effects of the institutional environment provide nuanced insights into the relationship. Thisstudy offers valuable implications for policymakers, highlighting the need to prioritize impactful financial in-clusion over mere financial sector expansion, alongside focusing on other growth-enhancing initiatives. Thisstudy contributes to the body of knowledge by providing empirical evidence of the interaction effect of theinstitutional environment within this framework.

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