Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries
This study explores the dynamic connection between foreign direct investment (FDI), economic growth and CO2 emissions, a topic that has sparked considerable debate in extant literature. The study aims to shed light on these interactions within the context of South Asian countries. Uniquely, it expan...
Saved in:
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2024-12-01
|
| Series: | Sustainable Futures |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2666188824002065 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1846117631061393408 |
|---|---|
| author | Festus Victor Bekun Bright Akwasi Gyamfi Godwin Olasehinde-Williams Ashutosh Yadav |
| author_facet | Festus Victor Bekun Bright Akwasi Gyamfi Godwin Olasehinde-Williams Ashutosh Yadav |
| author_sort | Festus Victor Bekun |
| collection | DOAJ |
| description | This study explores the dynamic connection between foreign direct investment (FDI), economic growth and CO2 emissions, a topic that has sparked considerable debate in extant literature. The study aims to shed light on these interactions within the context of South Asian countries. Uniquely, it expands the traditional Environmental Kuznet Curve (EKC) model to a cubic specification, enabling an examination of the N-shaped relationships between pollution and GDP, as well as pollution and FDI. To this end, annual frequency data were employed while leveraging on the augmented mean group (AMG) panel estimation method.Empirical findings reveal both inverted U-shaped and N-shaped relationships, with the latter prevailing over the former in the long run. This confirms the pollution haven hypothesis, indicating that the environmental cost of FDI decreases as GDP increases. The study also discovers a substitutive relationship between FDI and GDP in terms of environmental impact, alongside a similar substitutive link between GDP and energy consumption. This indicates that the adoption of renewable energy, coupled with economic growth, leads to a reduction in carbon emissions. These insights offer crucial implications for enhancing environmental sustainability in South Asia. The outcomes of the pollution haven hypothesis calls for caution on foreign direct inflow especially on dirty growth which comes with trade-off with environmental quality.Thus, South Asian governments official should proactively direct foreign direct investment into green initiatives. These initiatives including renewable energy infrastructure that will foster clean growth and environmental quality by extension. |
| format | Article |
| id | doaj-art-509be0dca58d4729a18f6034b3ba2e04 |
| institution | Kabale University |
| issn | 2666-1888 |
| language | English |
| publishDate | 2024-12-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Sustainable Futures |
| spelling | doaj-art-509be0dca58d4729a18f6034b3ba2e042024-12-18T08:52:46ZengElsevierSustainable Futures2666-18882024-12-018100357Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian CountriesFestus Victor Bekun0Bright Akwasi Gyamfi1Godwin Olasehinde-Williams2Ashutosh Yadav3Department of Logistics Management, Istanbul Gelisim University, Istanbul, Turkiye; University of Economics and Human Sciences in Warsaw, Warsaw, Poland; Research Center of Development Economics, Azerbaijan State University of Economics (UNEC), Baku, Azerbaijan; Correspondence author.Faculty of Management, Multimedia University, 63100 Cyberjaya, Selangor, MalaysiaDepartment of Management Information SystemsIstanbul Ticaret University, Istanbul, Turkiye; Nizami Gajanvi Research Center of Sustainable Development & Green Economy, Azerbaijan State University of Economics, Baku, AzerbaijanSchool of Business, University of Petroleum and Energy Studies (UPES), Knowledge Acres, Dehradun, Uttarakhand, IndiaThis study explores the dynamic connection between foreign direct investment (FDI), economic growth and CO2 emissions, a topic that has sparked considerable debate in extant literature. The study aims to shed light on these interactions within the context of South Asian countries. Uniquely, it expands the traditional Environmental Kuznet Curve (EKC) model to a cubic specification, enabling an examination of the N-shaped relationships between pollution and GDP, as well as pollution and FDI. To this end, annual frequency data were employed while leveraging on the augmented mean group (AMG) panel estimation method.Empirical findings reveal both inverted U-shaped and N-shaped relationships, with the latter prevailing over the former in the long run. This confirms the pollution haven hypothesis, indicating that the environmental cost of FDI decreases as GDP increases. The study also discovers a substitutive relationship between FDI and GDP in terms of environmental impact, alongside a similar substitutive link between GDP and energy consumption. This indicates that the adoption of renewable energy, coupled with economic growth, leads to a reduction in carbon emissions. These insights offer crucial implications for enhancing environmental sustainability in South Asia. The outcomes of the pollution haven hypothesis calls for caution on foreign direct inflow especially on dirty growth which comes with trade-off with environmental quality.Thus, South Asian governments official should proactively direct foreign direct investment into green initiatives. These initiatives including renewable energy infrastructure that will foster clean growth and environmental quality by extension.http://www.sciencedirect.com/science/article/pii/S2666188824002065Environmental sustainabilitycarbon reductionforeign direct investmentrenewable energyeconomic growthSouth Asia |
| spellingShingle | Festus Victor Bekun Bright Akwasi Gyamfi Godwin Olasehinde-Williams Ashutosh Yadav Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries Sustainable Futures Environmental sustainability carbon reduction foreign direct investment renewable energy economic growth South Asia |
| title | Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries |
| title_full | Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries |
| title_fullStr | Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries |
| title_full_unstemmed | Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries |
| title_short | Revisiting the Foreign Direct Investment-CO2 Emissions Nexus within the N-EKC Framework: Evidence from South Asian Countries |
| title_sort | revisiting the foreign direct investment co2 emissions nexus within the n ekc framework evidence from south asian countries |
| topic | Environmental sustainability carbon reduction foreign direct investment renewable energy economic growth South Asia |
| url | http://www.sciencedirect.com/science/article/pii/S2666188824002065 |
| work_keys_str_mv | AT festusvictorbekun revisitingtheforeigndirectinvestmentco2emissionsnexuswithinthenekcframeworkevidencefromsouthasiancountries AT brightakwasigyamfi revisitingtheforeigndirectinvestmentco2emissionsnexuswithinthenekcframeworkevidencefromsouthasiancountries AT godwinolasehindewilliams revisitingtheforeigndirectinvestmentco2emissionsnexuswithinthenekcframeworkevidencefromsouthasiancountries AT ashutoshyadav revisitingtheforeigndirectinvestmentco2emissionsnexuswithinthenekcframeworkevidencefromsouthasiancountries |