Moving towards the path of environmental sustainability in Developing-8 countries: investigating the role of country's reputation in mitigating environmental externalities.

A country's reputation plays a crucial role in shaping public perceptions, attracting investment and promoting economic development. At the same time, good governance is essential for promoting environmental sustainability and addressing pressing environmental issues such as climate change, pollution and natural resource depletion. This study examines the impact of a country's reputation on environmental sustainability in Developing-8 countries using panel data obtained from the Worldwide Governance Indicators and World Development Indicators for the duration from 1996 to 2020. This panel study adopted the Method of Moment Quantile Regression with fixed effects and mean-based regressions. The results demonstrated that the impact of the country's reputation index on carbon dioxide (CO) emissions is negative, yet significant. Also, all the country's reputation indicators negatively affect CO emissions, but the case of political stability is only significant in the mid-quantiles, while government effectiveness is albeit insignificant across quantiles. Furthermore, economic growth is observed to stimulate CO emissions, while renewable energy consumption decreases CO emissions. These results have an inherent heterogeneity, culminating in an asymmetric pattern of the distribution of CO emissions. The novelty of this study is, firstly, the construction of a country's composite reputation index for Developing-8 countries; and secondly, assessing the impact of this index in mitigating environmental externalities measured by CO emissions. Based on these findings, it is recommended, among other things, the need for the D-8 countries to improve their reputation policy to be able to attain the desired environmental sustainability.