Does the Government Influence the Relationship Between the Globalization of the Digital Economy and Environmental Quality?

Document Type : Original Article

Authors

1 PhD Student in Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran

2 PhD student in Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran

Abstract
The digital economy has become one of the most important drivers of economic growth, innovation, and technological transformation in recent decades, yet its environmental impacts continue to be the subject of much attention and debate in the economic literature. This study investigates the impact of the digital economy on environmental quality and analyzes the moderating role of institutional quality in selected Middle East and North Africa countries from 2005 to 2023. In this regard, the Panel Smooth Transition Regression (PSTR) model was used to identify nonlinear relationships and threshold effects. The study's dependent variable is the environmental quality index, and the model includes the digital economy development index, institutional quality, gross domestic product, government effectiveness, corruption control, and regulatory quality as explanatory variables. The research findings show that institutional quality plays a decisive role in the direction and intensity of the impact of the digital economy on environmental quality; in such a way that improving the quality of institutions moderates the impact of the digital economy on environmental quality and can affect the path of its impact in different directions (improving or weakening environmental quality). Accordingly, strengthening institutional reforms and improving the quality of governance should be the focus of policymakers' attention simultaneously with the development of the digital economy in the countries under study

Keywords

Subjects

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Volume 2, Issue 6
Spring 2026
Pages 55-68

  • Receive Date 25 February 2026
  • Revise Date 17 March 2026
  • Accept Date 27 April 2026