Abstract
The recent study aim is to scrutinize the moderating role of natural resources between institutional quality and carbon dioxide (CO2) emissions in 106 developing countries from 1996 to 2017 by using dynamic fixed effect, generalized method of moments (GMM) and system generalized method of moments (system GMM) estimators as well as apply the instrumental fixed effect, the instrumental time fixed effect and instrumental system GMM estimators as robustness. We make use of dynamic models and instrumental system GMM to reduce the result of autocorrelation increasing from misspecification of a model as well as clear the biases from unnecessary data and solve the possible endogeneity issues. The empirical results indicate that financial development, trade, and institutional factors: corruption perception control, government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability play a vital role in CO2 emissions reduction but natural resources along with economic growth are the core factors that cause CO2 emission in developing countries. On the opposing, natural resources boost the indirect impact of institutional quality on CO2 emissions in developing countries.