Analysis of the response of environmental investment effects on environmental quality regarding social and human capital changes in Iran

Document Type : Original Article


1 Accounting Department, Faculty of Social Sciences, Imam Khomeini International University, Qazvin, Iran

2 Economic Department, Faculty of Economics, Management and Accounting, University of Sistan and Baluchestan, Zahedan, Iran


Recent studies have identified social capital as an important and influential factor in improving the management of environmental issues as it facilitates and strengthens the cooperation of environmental activists to solve problems in the field of the environment. This paper aimed to examine the role of social and human capital in ways that environmental investments affect the quality of the environment in Iran. 
 Material and methods:
In this research, using the Kalman Filter approach and data from 1974 to 2016, the trend of changes in the effecting coefficient of environmental investment on the quality of the environment in Iran was estimated using the Eviews software. Then, in the framework of the Johansson cointegration method, while examining the stationarity of the variables by augmented Dickey Fuller unit root test and determining the number of convergence relationships using the effects and maximum eigenvalues tests, long-term relationships between social capital, human capital, and effecting coefficient of environmental investment was estimated using Maximum Likelihood method in Microfit software. Impulse response functions were also used to examine how the effecting coefficient of environmental investment on the quality of the environment reacts to changes in social and human capital.
Results and discussion:
The results of estimating the effecting coefficient of environmental investment on the quality of the environment in Iran using the Kalman filter method showed that this coefficient has experienced a fluctuating trend in the studied period. The results of the estimation of long-term cointegration relationships suggest that there was a significant relationship between fluctuations of this coefficient and fluctuations of social and human capital. This means that with the increase in social capital in a society, the effecting coefficient of environmental investment on the quality of the environment will be strengthened and vice versa. The findings of the impulse response functions showed that applying a shock in social capital in a given period leads to stimulation and reaction of the affecting coefficient of environmental investment on the quality of the environment and, ultimately, the formation of a different level of equilibrium for this coefficient in the next periods. The results of the estimation of error correction vectors also indicate that, on average, 26% of each period nonequilibrium in environmental investment impact on the quality of the environment is moderated in the next period.
Based on the findings of this research, the effectiveness and efficiency of environmental investments in improving the quality of the environment depend, to a large extent, on the knowledge and trust of the community in relation to the programs and activities defined in this regard, as well as the level of their effective participation in the definition and implementation of these programs and activities. In other words, the one-way and top-down approach of the government in the field of environmental protection is not enough to guarantee the achievement of the goals set for environmental management. It is necessary to design and provide the mechanisms required to attract the participation and trust of individuals and different stakeholders involved in the environmental management process at all levels.


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