3.1. Variable Description and Data
We collect the data of CO2 emissions per capital from 1960 to 2014 given by the World Bank and obtained the smoothing variable lnCO2 as the dependent variable after taking the natural logarithm.
To determine whether an international organization is an IGO, the following three conditions must be met (Wallace and Singer [
14]): (1) the intergovernmental organization must be composed of at least three sovereign states; (2) intergovernmental organizations must hold regular plenary meetings at least once every ten years; (3) intergovernmental organizations must have a permanent secretariat and corresponding headquarters.
The Correlates of War Project (COW database) lists the intergovernmental organizations that meet the three conditions mentioned above from 1816 to 2014. We collect the number of IGOs in which the sample countries participated from 1960 to 2014 given by the Correlates of War Project (COW database).
From 1960 to 2014, some countries experienced changes in their political power, resulting in mergers and splits. In order to match countries with databases such as the World Bank, we manually adjusted each regime change country based on its political and economic attributes. The specific adjustment process is as follows.
First, East Germany and West Germany merged in 1990. As East Germany belonged to the Soviet Union and West Germany belonged to the United States, it was not possible to add them together. Therefore, West Germany was assigned to Germany (all literature studying Germany uses West German data as pre-1990 German data).
Second, Czechoslovakia split into two countries, the Czech Republic and Slovakia, after 1993, and the data for Czechoslovakia were directly deleted, while the data for the Czech Republic and Slovakia from 1993 to 2014 were retained.
Third, in 1975, North Vietnam occupied Saigon and South Vietnam was annihilated, resulting in the unification of the north and south into present-day Vietnam. Therefore, North Vietnamese data were retained as Vietnam and South Vietnamese data were deleted as Svietnam.
Fourth, Zanzibar is an integral part of the United Republic of Tanzania with only 2 years of data. Zanzibari data were removed, and Tanzania data were retained.
Fifth, the Republic of Yemen was formed in May 1990 by the merger of the Yemen Arab Republic (North Yemen, Nyemen) and the People’s Democratic Republic of Yemen (South Yemen, Syemen), with Islam as the state religion and Arabic as the official language. Therefore, South Yemen was deleted, and data from North Yemen before 1990 were assigned to the Republic of Yemen.
Sixth, the Republic of Macedonia gained independence from Yugoslavia in 1991. As Yugoslavia was not listed in databases such as the World Bank, Macedonia was retained and Yugoslavia was deleted.
Seventh, East Timor gained independence from Indonesia in 2003 and retained its data unchanged.
Eighth, the original database has already processed data from former Soviet Union countries, so data from countries such as Russia and Ukraine can be directly used.
We assign values to the status of sample countries in IGOs provided in the database. The “Full Membership” status is assigned a value of 1, indicating that in a specific year, the status of a specific sample country in a specific intergovernmental organization was “participating”, while other statuses are assigned a value of 0. We add up the number of IGOs that the sample countries participated in each year and smoothed the natural logarithm to obtain the explanatory variables lnIGO.
IGO networks have similarities with interpersonal networks, and their complexity and the network of connections between individuals also have commonalities. Social network analysis can characterize the clustering effects of different countries in IGOs, which can address endogenous problem. Therefore, we use social network analysis to calculate the degree centrality and closeness centrality of the specific sample country in IGO networks. The degree centrality refers to the number of IGOs jointly participated by the sample country and other countries, revealing the degree of closeness between the sample country and other countries. The closeness centrality is calculated by the distance of the sample country from other countries, which can be used to estimate the time it takes for information or resources to be transmitted.
We use data given by the Correlates of War Project to calculate the degree centrality and closeness centrality of specific sample country, recorded as Degree and Closeness, respectively. We replace the explanatory variable lnIGO with Degree and Closeness in basic regression to ensure the robustness of basic regression.
The following six variables are selected as control variables: natural logarithm of GDP (ln
GDP), growth rate of GDP per capita (
GDPPg), openness level (
Exim), proportion of industrial added value to GDP (
Industry), urbanization level (
Urban), and proportion of gross capital formation to GDP (
Capital). Openness level is calculated by the sum of the proportion of exports and imports of goods and services to GDP. All the control variables are collected from the World Bank. Descriptive statistics of variables are shown in
Table 1.
In
Table 2, we can see that the correlations between independent variables and control variables are not high, with correlation coefficients of less than 0.5., except for two relationships. The correlation between Degree and ln
IGO is 0.787 (
p < 0.01), and the correlation between Degree and Closeness is 0.814 (
p < 0.01). These high correlations result in high VIF values, indicating a potential multicollinearity problem. However, since Degree and ln
IGO, as well as Degree and Closeness, do not appear together in the models, there is no multicollinearity issue in practice.
The correlation test between variables is shown in
Table 2 to ensure that there is no multicollinearity among the variables before proceeding with the analysis. In
Table 2, we can see that the correlations between independent variables and control variables are not high, with correlation coefficients of less than 0.5. Three independent variables are independently entered into the regression equation for fixed effects model testing, and their correlation does not affect the validity of the regression results. In addition, the control variables, except for GDP which is an absolute value, are all relative values. Performing relative value processing on the control variables can effectively reduce the collinearity of macroeconomic variables in time series.
3.2. Empirical Model Selection
This paper studies the impact of countries joining IGOs on air pollution by choosing CO
2 emissions as the dependent variable and choosing the number of IGOs participated in as the independent variable. We want to focus on the coefficient
β1 of the core independent variable (ln
IGO) to see whether there is a significantly negative relationship between CO
2 emissions and the act of joining IGOs. The model is constructed as the following Equation (1).
where
i represents the
ith country and
t represents the
tth year. ln
CO2 is the dependent variable, and ln
IGO is the explanatory variable. X represents the control variables, including natural logarithm of GDP (ln
GDP), growth rate of GDP per capita (
GDPPg), openness level (
Exim), proportion of industrial added value to GDP (
Industry), urbanization level (
Urban), and proportion of gross capital formation to GDP (
Capital).
In light of the differences among different countries, we first construct the panel variable coefficient model and select the optimal model based on the model estimation results. In addition, individual fixed effects or individual random effects need to be chosen when constructing the model. The fixed effect model is shown as Equation (2), followed by Zhang et al. [
15], where
Countryi captures the country fixed effect, and
yeart captures the year fixed effect.
The random effect model is shown as Equations (3) and (4).
To decide which model is much more appropriate to conduct, we use the Hausman test. The null hypothesis behind the Hausman test is that there is no significant difference in the estimators between the fixed effects model and the random effects model. If the null hypothesis is rejected, the conclusion is that the random effects model is not appropriate, because the random effects may be related to one or more regressors. In this case, the fixed effects model is better than the random effects model. The results of the Hausman test are shown in
Table 3. According to the Hausmann test (Prob < 0.10), we should build a model of fixed effects.
As for country panel data, there may be cross-section dependence and slope heterogeneity in the sample. It is better to test cross-section dependence and slope heterogeneity before choosing the final regression model. If the panel data has the property of cross-section dependence and slope heterogeneity, common correlated effects mean group (CCEMG) estimator and the augmented mean group (AMG) estimator need to be applied. However, the sample data in this study are too unbalanced to conduct the two tests mentioned above, and the square terms in the model are not well applied to the tests. Therefore, we still choose the fixed effects model, which can meet the needs of the short unbalanced data and square terms followed by Li et al. [
16]. In addition, to solve the problem of heteroscedasticity and sequence autocorrelation in the panel data, the fixed effects regression is clustered to the country and year level, followed by Azzimonti [
17].