Abstract: We explore the potential impact of countries’ environmental performance (as are these proxied by the Environmental Performance Index) on their economic development by accounting for potential spatial effects modulating the interlinkages between these variables. For this purpose, we employ the Geographically Weighted Regression (GWR) approach for a 2023 dataset of 167 countries and territories. We find that geographical location matters in explaining the capacity of a country to use its environmental performance to sustain its development path. Nonetheless, the associated effects appear to be non-linear and geographically heterogeneous. Other socioeconomic variables (such as population density, urban population and oil rents) are also relevant. The findings are robust for various GWR model specifications. Some policy implications are derived.

Keywords: Economic development, environmental performance, spatial effects, Geographically Weighted Regression, urbanization, natural rents

JEL codes: F64, O10, O19, O57, Q51, Q56

DOI: ...