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Economic Freedom and Environmental Sustainability in the N‐11: Quantile Insights Into the Load Capacity Factor

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  • Yuxi Fu
  • Alfie Blake

Abstract

This study investigates the relationship between economic freedom and environmental sustainability in the Next Eleven (N‐11) economies from 2000 to 2022. Employing the Method of Moments Quantile Regression (MMQR), it examines the heterogeneous effects of twelve subcomponents of economic freedom—including property rights, judicial effectiveness, fiscal health, trade freedom, and investment freedom—on the load capacity factor (LCF), a comprehensive measure of ecological balance. The results show that institutional quality and regulatory efficiency improve environmental performance, whereas excessive taxation and unregulated financial liberalization undermine it. Business freedom consistently supports sustainability, while labor and monetary freedoms exert mixed effects across quantiles, highlighting the conditional nature of reforms. Robustness checks using Driscoll–Kraay fixed effects confirm the main findings, particularly the positive role of government spending and judicial effectiveness, and the adverse impacts of property rights weaknesses and financial liberalization. These results underscore the need for evidence‐based, context‐specific reforms: strengthening judicial systems, enhancing fiscal discipline, and embedding environmental safeguards within financial and investment liberalization are crucial for aligning economic freedom with sustainability. By linking liberalization strategies with green investment and institutional strengthening, N‐11 economies can pursue sustainable growth while advancing their commitments to the sustainable development goals (SDGs).

Suggested Citation

  • Yuxi Fu & Alfie Blake, 2026. "Economic Freedom and Environmental Sustainability in the N‐11: Quantile Insights Into the Load Capacity Factor," Sustainable Development, John Wiley & Sons, Ltd., vol. 34(1), pages 1270-1285, February.
    • Handle: RePEc:wly:sustdv:v:34:y:2026:i:1:p:1270-1285
    DOI: 10.1002/sd.70316
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