Issue #2 (Volume 17 2026)

Type of the article: Research Article

Abstract
This study examines how foreign direct investment (FDI) has affected manufacturing carbon emissions in eight ASEAN economies from 2005 to 2022 using panel data from the World Bank and UNCTAD and employing random effects and feasible generalized least squares estimators. The preferred specification indicates that a 1 percentage point increase in manufacturing-adjusted FDI inflows (as a share of GDP) is associated with a 0.018-unit rise in log manufacturing CO₂ emissions (approximately 1.8%). Simultaneously, population size (coefficient ≈ 0.94) and fossil fuel energy consumption (coefficient ≈ 0.053) exert strong positive and statistically significant effects. By contrast, per capita income and its squared term are not significant, providing no support for a Kuznets type nonlinear income-emissions relationship, and lagged emissions add little once contemporaneous drivers and error structures are controlled for. The results suggest that FDI has primarily flowed into emissions-intensive manufacturing activities, with limited evidence of broad-based clean technology transfer, thereby risking a lock-in of carbon-intensive development that undermines ASEAN’s Net Zero ambitions and intergenerational equity. The paper argues that tighter environmental standards for FDI, an accelerated energy transition away from fossil fuels, and integrated population planning is needed to reconcile manufacturing-led industrial expansion with sustainability goals in ASEAN. It also offers sector specific evidence to guide FDI governance and energy policy in middle-income countries.

Type of the article: Research Article

Abstract
In the context of growing pressure on forest ecosystems arising from agricultural area expansion and intensification, expanding population, and climate variability, this study aims to identify and quantify the impacts of these changes on forest coverage in the South Asian region. Using a balanced panel dataset for 1990–2023, the analysis employs a regularized fixed-effects estimation to identify the key drivers of forest area change and assess variable importance.
The findings show that a 1% increase in agricultural value added is achieved at the cost of a 0.32% decrease in forest area, making it the most significant driver of forest loss. Use of inorganic fertilizer also exerts a strong negative influence, as forest cover is reduced by 0.18% for every additional percentage usage of fertilizer. Irrigation expansion has a similarly adverse effect, contributing to a 0.21% decline per 1% increase in irrigated area. Population density growth intensifies pressure on forests, with each additional 10 persons per km² corresponding to a 0.05% decrease in forest area. However, pasture share exhibits a positive association: a 1-percentage-point increase corresponds to a 0.14% rise in forest area, and cattle density also shows a modest but positive effect. The results indicate the presence of mixed livestock–forest systems and early forest-transition dynamics in some countries.
Overall, the findings demonstrate that the pattern of agricultural practices determines forest trajectories in South Asia, and achieving sustainability will require country-specific strategies that balance productivity growth with integrated land-use planning and long-term conservation goals.

Type of the article: Research Article

Abstract
This study examines the long-term and short-term dynamic interactions between PM2.5 pollution and its anthropogenic determinants, namely industrial activity, urbanization, economic growth, total energy use, and renewable energy utilization, across five Central Asian countries (Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan) from 1992 to 2023. Preliminary tests validate pronounced cross-sectional dependence and notable slope heterogeneity, substantiating the application of the Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) model. The Westerlund cointegration results demonstrate a strong long-term equilibrium relationship. The long-term CS-ARDL estimations indicate that industrial activity is the primary driver of PM2.5 pollution, followed by total energy consumption. The analysis reveals evidence supporting the upward-sloping segment of the Environmental Kuznets Curve (EKC), as economic growth significantly elevates PM2.5 levels. In contrast, the squared GDP term is insignificant, suggesting the absence of a turning point in pollution reduction. Renewable energy consumption has a negligible moderating effect. The Error Correction Term is negative and statistically significant, indicating that approximately 24.5% of deviations from the long-term equilibrium are corrected each year. The findings indicate that environmental stability in Central Asia necessitates a strategic transformation of industrial and energy policy, underscoring the importance of coordinated regional initiatives to modernize grids and promote green industrial practices to decouple economic expansion from particulate pollution.

Type of the article: Research Article

Abstract
This study investigates the nonlinear dynamics of the relationship between foreign trade and carbon dioxide (CO₂) emissions in Uzbekistan over the period 1997–2024. The analysis employs annual time-series data from the World Bank’s World Development Indicators (WDI) database, including three key variables: CO₂ emissions per capita (tonnes), exports of goods and services (current USD), and imports of goods and services (current USD). Using the Markov switching regression (MSR) model, the study identifies two distinct economic states: an export-oriented regime (Regime 1) characterized by high industrial production and export activity, and an import-driven regime (Regime 2) characterized by domestic consumption patterns and elevated import flows.
The empirical results demonstrate that the export–emissions relationship is regime-dependent: exports have a statistically significant positive effect on CO₂ emissions only during export-oriented periods (β = 1.54 × 10–10, p < 0.01), while this relationship becomes insignificant during import-driven periods (β = 5.20 × 10–11, p = 0.378). In contrast, imports consistently reduce CO₂ emissions across both regimes (Regime 1: β = −1.05×10–10; Regime 2: β = −1.07 × 10–10, both p < 0.01), indicating a stable import-substitution effect that displaces domestic production-related emissions. The transition probability analysis reveals high persistence in both regimes (P₁₁ = 79.69%, P₂₂ = 81.22%), with structural shifts occurring approximately every five years (expected durations: 4.92 years for Regime 1 and 5.32 years for Regime 2). These findings confirm that the trade–emissions relationship in Uzbekistan is nonlinear and regime-dependent, necessitating the development of regime-sensitive environmental and trade policies.

Type of the article: Research Article

Abstract
The environmental and economic benefits of voluntary firm-level practices are often assumed but rarely tested, particularly with respect to firm-level heterogeneity in developing economies. This study aims to estimate the effect of two voluntary environmental practices (energy management and CO2 emissions monitoring) on firm productivity in Morocco, and to test whether these effects vary across the productivity distribution. Using firm-level microdata from the 2023 World Bank Enterprise Survey on 598 Moroccan manufacturing and service firms, conditional quantile regressions and quantile treatment effects with propensity score matching are employed to address heterogeneity and potential endogeneity. The results show that energy management practices increase productivity by 33% and CO2 monitoring by 57% on average. However, these average effects mask substantial heterogeneity. At the 10th percentile, energy management yields a 9.6% gain while CO2 monitoring has no significant effect. At the 50th percentile, energy management yields a 46.4% increase, while CO₂ monitoring yields a 61.2% increase. At the 90th percentile, energy management yields 28.4% and CO2 monitoring 61.7%. Quantile treatment effects confirm this heterogeneity but reveal that energy management benefits mid-to-upper performers (30th–70th percentiles), whereas CO2 monitoring benefits primarily low-performing firms (10th–20th percentiles). These findings indicate that the impact of voluntary environmental practices is context- and firm-specific. Policy implications suggest that differentiated support strategies are required to enhance both environmental and economic performance in developing economies.

Acknowledgments
We are grateful to Mohammed V University of Rabat, the Faculty of Law, Economics and Social Sciences – Agdal (FSJES-Agdal) and the Laboratory of Applied Economics for their institutional support.
This work was supported by the Centre National pour la Recherche Scientifique et Technique (CNRST).

Type of the article: Research Article

Abstract
This study aims to investigate the behavioral and policy drivers of environmentally friendly transportation use in Vietnam by integrating environmental economics with behavioral theories of pro-environmental action. Primary data were collected through a structured online and in-person survey conducted across Vietnam’s northern, central, and southern regions between March and December 2025. The survey targeted respondents with regular daily travel activities to ensure a relevant transportation experience, and 538 valid responses were retained after data screening for analysis. Data were analyzed using PLS-SEM with SmartPLS software. The results show that behavioral intention is the strongest direct predictor among the examined factors of environmentally friendly transportation use (β = 0.472, p < 0.001), followed by perceived behavioral control (β = 0.283, p < 0.001) and benefits awareness (β = 0.108, p < 0.001). Attitude, subjective norm, and personal norm also exert significant positive effects on behavioral intention. Government policies, environmental awareness, and awareness of consequences positively shape personal norms, with government policies exerting the strongest effect (β = 0.450, p < 0.001). In addition, service availability and willingness to pay enhance perceived behavioral control, while ease of use strengthens benefits awareness. These findings highlight that environmentally friendly transportation adoption in Vietnam depends on the joint effects of behavioral motivation, normative influence, and structural feasibility, suggesting that integrated policy approaches are essential for promoting sustainable mobility in developing economies.

Type of the article: Research Article

Abstract
Considering the increasing environmental pressures associated with economic growth and industrial expansion, improving environmental quality has become a central challenge for advanced economies. Green innovation is crucial for sustainable development, but its success largely depends on the regulatory context. This paper examines the relationship between green innovation and environmental degradation and assesses how market-based and non-market environmental policy instruments shape this relationship in 25 OECD countries over the period 2000–2020. Building on existing theoretical and empirical frameworks linking environmental regulation, technological innovation, and environmental performance, the study employs a dynamic panel modeling approach using a two-step System-GMM estimator to address endogeneity, heterogeneity, and the persistence of environmental indicators. Empirical results indicate that a 1% increase in green patent activity reduces CO2 emissions by 0.34% and the ecological footprint by 0.33%. Market-based instruments significantly decrease CO2 emissions and the ecological footprint with coefficients of –0.679 and –0.068, respectively, whereas non-market instruments are associated with increases in CO2 emissions and the ecological footprint with coefficients of +0.045 and +0.038, respectively. The interaction between market-based instruments and green innovation further reduces CO2 emissions and the ecological footprint, with coefficients of –0.00004 and –0.0006, respectively, while the interaction with non-market instruments also yields negative effects (–0.00001 and –0.00002). The aggregate environmental policy stringency index lowers CO2 emissions by 0.159 and the ecological footprint by 0.041, strengthening the innovation effect. Overall, the findings suggest that well-designed and coherent policy mixes are essential for maximizing green innovation’s environmental benefits in advanced economies.

Type of the article: Research Article

Abstract
This study explores the impact of environmental uncertainty and industry competition on environmental, social, and governance (ESG) practices and company value in the energy sector across six ASEAN countries (Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam) during 2013–2024. Using an unbalanced panel dataset comprising 257 companies and 2,570 observations, the analysis employs a two-way fixed effects (FE) model and bootstrap mediation tests. The results reveal four critical findings. First, environmental uncertainty (β = 0.032, p < 0.001) and industry competition (β = 0.021, p = 0.010) exert a significant positive influence on ESG practices, suggesting that firms enhance sustainability disclosures as a strategic mechanism to maintain institutional legitimacy and manage exogenous risks. Second, both environmental uncertainty (β = –0.047, p < 0.001) and industry competition (β = –0.056, p = 0.006) significantly reduce firm value (Tobin’s Q) due to heightened market volatility, margin compression, and increased risk premiums. Third, ESG practices do not exhibit a significant direct effect on company value (β = 0.011, p = 0.560), indicating that direct financial premiums from sustainability efforts remain limited in the short term. Finally, bootstrap mediation tests confirm that ESG does not significantly mediate the influence of either environmental uncertainty or industry competition on firm value. This study highlights ESG as a risk mitigation tool rather than a direct driver of corporate valuation within the ASEAN energy landscape. It advises energy practitioners to integrate ESG policies with operational resilience while accounting for systemic external pressures in their core corporate strategy.

Acknowledgment
We gratefully acknowledge the financial support provided by the Ministry of Higher Education, Science, and Technology of the Republic of Indonesia.

Type of the article: Research Article

Abstract
Economic growth and foreign direct investment constitute critical determinants of environmental sustainability. This study empirically examines the nexus between these factors and environmental degradation, proxied by the ecological footprint and carbon emissions, while controlling for urbanization and natural resource depletion. Leveraging the strictly complete panel dataset from 17 selected Asian economies spanning 1990 to 2023, the analytical framework incorporates a comprehensive suite of diagnostic tests, including assessments of multicollinearity, cross-sectional dependence, stationarity, cointegration, and model specification. Diagnostic results confirm the absence of multicollinearity, establish stationarity at first differences, and validate long-run cointegration for both environmental models. Empirical evidence delineates five key findings. First, economic growth exhibits a positive and significant impact on both ecological footprint and carbon emissions, whereas its squared term exerts a negative and significant effect, corroborating the Environmental Kuznets Curve. Second, foreign direct investment increases the ecological footprint significantly, supporting the Pollution Haven Hypothesis. Conversely, foreign direct investment reduces carbon emissions, suggesting the presence of the Pollution Halo Hypothesis. Next, urbanization significantly amplifies the ecological footprint but mitigates carbon emissions. Finally, natural resource depletion significantly reduces the ecological footprint while intensifying carbon emissions. Collectively, these results underscore the complex roles of economic growth and foreign direct investment in environmental sustainability and affirm the concurrent applicability of the Environmental Kuznets Curve, Pollution Haven, and Pollution Halo theoretical frameworks within the Asian context.

Type of the article: Research Article

Abstract
The transition toward low-carbon economies has become a central environmental priority worldwide, requiring nations to allocate adequate resources for conservation efforts. However, emerging economies often face chronic shortages of environmental conservation funds, constraining their progress toward sustainability. Addressing this challenge, the present empirical study examines the dynamic influence of tech-driven financial development on national environmental conservation funds, with IT governance introduced as a moderating factor. Using a panel dataset of 55 emerging economies from 2004 to 2023, the analysis employs the two-step system generalized method of moments (sys-GMM) and dynamic panel data estimation (DPDE). The results reveal that both tech-driven financial development and IT governance significantly increase environmental conservation funds, with coefficients of 1.633 (p < 0.05) and 1.272 (p < 0.01), respectively. Moreover, their interaction produces a further positive moderating effect, with a coefficient of 1.294 (p < 0.01), indicating that strong IT governance enhances the effectiveness of tech-driven financial systems in scaling and optimizing environmental conservation funds. These findings underscore the need to integrate technological innovations in finance with robust IT governance frameworks to strengthen environmental financing in emerging economies. Policy recommendations are offered based on the empirical outcomes. The empirical investigation conclusively demonstrates that both tech-driven financial development and robust IT governance serve as pivotal catalysts for the mobilization of environmental funds within emerging economies. Crucially, the observed synergistic interplay between these two elements indicates that well-structured digital governance frameworks significantly amplify the efficacy of financial technology in channeling resources toward environmental conservation.

Type of the article: Research Article

Abstract
The global imperative to address climate change has transformed financial markets, yet the mechanisms through which carbon disclosure influences investor decisions remain insufficiently understood. Prior reviews characterize findings as inconclusive due to inadequate mechanism specification and contextual variation, leaving policymakers, corporate managers, and investment professionals without evidence-based guidance. This review synthesizes evidence examining how carbon disclosure is associated with investment decisions through distinct mechanisms across varying contexts. Following PRISMA 2020 guidelines, we systematically searched Scopus and Web of Science databases, identifying 228 unique records published between 2020 and 2025. After rigorous screening, we extracted and synthesized data from 10 empirical studies examining disclosure mechanisms, contextual moderators, and methodological quality. Evidence suggests that carbon disclosure is associated with investor responses through hierarchical mechanisms, where information asymmetry reduction serves as the foundational pathway enabling risk communication and signaling. Mandatory disclosure regimes tend to generate stronger effects than voluntary approaches, while high-carbon sectors demonstrate comparatively larger investor responses, likely reflecting greater climate risk materiality. Post-2020 findings indicate heightened associations compared to pre-2020 periods, consistent with regulatory acceleration and market maturation. Methodological quality substantially shapes observed findings, with quasi-experimental approaches providing more conservative and causally credible estimates than observational designs. Overall, disclosure effectiveness appears to depend on mechanism activation, institutional context, and measurement quality. These findings offer preliminary evidence-based guidance for designing mandatory disclosure frameworks, developing corporate disclosure strategies, and integrating climate risks into institutional investment practices, though conclusions should be interpreted cautiously given the limited sample of studies and heterogeneity across research designs.

Acknowledgments
We acknowledge the institutional support provided by Universitas Mercu Buana, Universitas Trisakti, and Akademi Digital Bandung in conducting this research.

Type of the article: Research Article

Abstract
For sustainable development to be achieved, financial systems must be in place that can channel financial resources more efficiently into sectors that positively impact the environment. This study aims to examine whether the development of both green sukuk and financial technology increases environmental finance efficiency in Malaysia, Indonesia, and the UAE. A balanced panel dataset of 45 country-years from 2010 to 2024 is employed in this study. Fixed effects and dynamic system generalized method of moments estimators are used to estimate the model based on secondary data from various sources such as the World Bank, International Monetary Fund’s Financial Access Survey, United Nations Conference on Trade and Development, Environmental Performance Index, Climate Bonds Initiative, Refinitiv, and Bloomberg. The study finds that both green sukuk and financial technology have a positive and significant impact on environmental finance efficiency in Malaysia, Indonesia, and the UAE, and that financial technology enhances the efficiency effect of green sukuk in Malaysia and other Islamic economies in general. In Malaysia, the highest efficiency effect comes from the sukuk market depth, while in the UAE, it comes from financial technology development. In Indonesia, it comes from both financial deepening and financial technology development. The study suggests that financial technology and green sukuk are complementary in driving environmental finance efficiency in Islamic economies.

Type of the article: Research Article

Abstract
Environmental reporting is expanding, yet many firms achieve limited environmental improvement when carbon effects are not translated into decision-relevant cost information for budgeting, pricing, and investment appraisal. This study examines whether integrating carbon costing into activity-based costing is associated with higher carbon and environmental disclosure quality and lower carbon intensity among listed firms in Jordan. The analysis uses disclosures for 12 firms over 2018–2024 and estimates two-way fixed-effects panel models with firm-clustered standard errors to test whether within-firm changes in costing integration are followed by changes in disclosure quality and emissions intensity after controlling for firm-specific unobserved heterogeneity and common year effects. The results show no statistically significant association between costing integration and disclosure quality (β = 0.013, p > 0.10) and no significant association with carbon intensity (β = 0.238, p > 0.10). The interaction analysis further indicates that the integration–disclosure relationship is not stronger in environmentally sensitive industries (β = −0.350, p > 0.10). By contrast, firm size is positively related to disclosure quality, suggesting that visibility, organizational capacity, and reporting resources matter more than costing integration in this context. These findings indicate weak implementation depth rather than clear environmental gains. Overall, carbon-costing integration has not yet become sufficiently embedded in routine managerial practice to produce measurable improvements in disclosure quality or emissions performance in Jordanian listed firms.