Does improvement in the environmental sustainability rating help to reduce the COVID-19 cases? Controlling financial development, price level and carbon damages

Abstract

The study's objective is to evaluate the impact of environmental sustainability rating, financial development, changes in the price level and carbon damages on the new COVID-19 cases in a cross-sectional panel of 17 countries. The study developed two broad models to analyse the relationship between the stated factors at the current level and forecast level. The results show that improvement in the environmental sustainability rating and financial efficiency reduces the COVID-19 cases, while continued economic growth and changes in price level likely to exacerbate the COVID-19 cases across countries. The forecast results suggest the U-shaped relationship between COVID-19 cases and carbon damages controlling financial development, price level and environmental sustainability rating. The variance decomposition analysis shows that carbon damages, environmental sustainability rating and price level changes will largely influence COVID-19 cases over the next year. The soundness of economic and ecological regulated policies would be helpful to contain coronavirus cases globally.

Keywords: COVID-19 pandemic; Carbon damages; Environmental sustainability rating; Financial development, price level; Robust least squares regression.