Factors Affecting Water Quality in Selected Asian Countries Using Spatial Durbin Model

The quality of water resources is essential for the protection of the environment and human public health. Decreasing water quality has several environmental effects. In addition to creating environmental problems, it increases the cost of governments. The aim of this research is to empirically examine the relationship between water quality and income in selected Asian countries, taking into account spatial dependencies between countries. A spatial econometric framework was applied using panel data for nine Asian countries from 2000 to 2020. The required data was obtained from the World Bank. First, the Moran test was performed to prove the existence of spatial dependence. Using the Wald test, the spatial Durbin model was determined as the optimal model. Then, using Stata17 software, the model was estimated. The results showed that there is significant spatial spillover in the model. GDP has the most positive effect on water quality in Asian countries, and population density has the most negative effect. The spatial spillover effect of real GDP per capita and foreign direct investment on water quality has been positive and significant. Spatial spillover of legality and effectiveness of the government has had a positive and significant effect on water quality.