Impact of Trade Openness, Green Energy, Economic Growth and Military Expenditures on Carbon Emissions in E-7 Countries: Panel Quantile Regression

Abstract

Increasing economic growth and environmental improvement are the ways to achieve sustainable development goals. In developing countries, increases in military expenditures, which are part of public expenditures, and the level of foreign trade may affect environmental quality. This study examines the impact of economic growth, trade openness, green energy and military expenditures on carbon emissions in E-7 countries for the period 1993-2023. The results confirm the existence of cross-sectional dependence, slope heterogeneity and cointegration relationship among the variables. Panel quantile regression results show that economic growth and trade openness increase carbon emissions and decrease environmental quality, while green energy and military expenditures reduce carbon emissions and increase environmental quality. The results are checked for robustness using FMOLS, DOLS, FE-OLS and Driscoll-Kraay estimators' longterm estimators and the results confirm the quantile regression results. These results provide important policy insights for E7 countries, which have significant potential in terms of the world economy. The study findings provide a broad perspective on environmental problems.