Does foreign direct investments impair the ecological footprint? New evidence from the panel quantile regression

Chowdhury, Mohammad Ashraful Ferdous; Shanto, Peal Ahamed; Ahmed, Afsana; Rumana, Rabeya Hossain

doi:10.1007/s11356-020-11518-0

Cited by 53 publications

(31 citation statements)

References 115 publications

(157 reference statements)

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“…These asymmetric effects occur between short-run and long-run dynamics within the same NARDL specification. Findings also show that there exists a positive relationship between FDI and changes in environmental pollution, biocapacity which supports the findings Doytch (2020), Chowdhury et al (2021), Baloch et al (2019), andHanif et al (2019). Findings of this study using the asymmetric dynamic multiplier indicate that negative and positive shocks on ecological footprint and biocapacity results in positive changes in FDI.…”

Section: Conclusion and Policy Implicationssupporting

confidence: 86%

“…Table 6: The results indicate the positive response of foreign direct investment to positive changes in ecological footprint and bio capacity in the long run this findings supports the findings of Baloch et al (2019), Chowdhury et al (2021), andDoytch (2020). This implies that increase in ecological footprint and bio capacity results in increases FDI.…”

Section: Empirical Findings and Discussionsupporting

confidence: 73%

“…Pollution Havens Hypothesis proved to be evident for foreign direct investment in the selected countries. Similarly, Chowdhury et al (2021) found a positive relationship between FDI and ecological footprint. Their research covered 92 countries from 2001 to 2016.…”

Section: Ecological Footprint and Foreign Direct Investmentmentioning

confidence: 85%

“…Production EF reveals biocapacity utilized in relation to production processes. Consumption EF indicates biocapacity embedded in human utilization of goods and services (Chowdhury et al, 2021). Consumption EF is computed as Production EF plus Imports EF less Exports EF.…”

Section: Introductionmentioning

confidence: 99%

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Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach

2022

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This study was carried out to analyze the impact of ecological footprint (EFP), exchange rate (EXC) and bio-capacity (BC) on foreign direct investment (FDI) in South Africa. The study was based on monthly time series data from 1996 to 2017. Asymmetric dynamic multiplier, Linear and Nonlinear Autoregressive distributed lag models were used to establish the relationship between the selected variables. Linear ARDL reveal significant symmetric relationship between FDI, ecological footprint, biocapacity and exchange rate in the short run. Nonlinear Autoregressive distributed lag (NARDL) bounds test confirmed the existence of cointegration between the variables. The non-linear short-run results reveal that positive shock of EXC affect FDI negatively. While positive shock from EFP has a significant and positive effect on FDI. Interestingly, in the long run the negative shock of EXC on FDI is negative while the positive shock of EXC affects FDI positively. Furthermore, the long-run asymmetric dynamic multiplier showed that the cumulative positive and negative effect of EFP and BC on FDI is positive. Hence, it is important that policies be put in place to ensure environmental sustainability and stable exchange rate while growing the South African economy. Policy regulations on production procedures in South Africa should be established to encourage advanced clean technologies in FDI production sectors

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Section: Conclusion and Policy Implicationssupporting

confidence: 86%

Section: Empirical Findings and Discussionsupporting

confidence: 73%

Section: Ecological Footprint and Foreign Direct Investmentmentioning

confidence: 85%

Section: Introductionmentioning

confidence: 99%

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Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach

2022

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“…Instead, this effect does not continue at a higher level of FDI, resulting in a U-shaped relationship. Recently, Chowdhury et al ( 2021 ) investigated the impact of FDI inflows on the ecological footprints of 92 countries in the period 2001–2016. Their findings reveal that the FDI is positively associated with the ecological footprint.…”

Section: Literature Reviewmentioning

confidence: 99%

Environmental strategies for achieving a new foreign direct investment golden decade in Algeria

Chaouachi¹,

Balsalobre‐Lorente

2022

Environ Sci Pollut Res

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While numerous studies have discussed the impact of economic growth on the environment, this paper advances in the empirical literature, aiming to validate the existence of an N-shaped environmental Kuznets curve (EKC) relationship between the ecological footprint and economic growth in Algeria during the period 1975–2014. The proposed empirical model includes as additional explanatory variables the foreign direct investment (FDI) and the electricity consumption aimed to increase the relevance of the results, correcting the lack of studies that have previously analyzed the EKC for the case of Algeria. Through the ARDL econometric approach, we confirm an N-shaped EKC between the per capita economic growth and ecological footprint in Algeria, reinforcing these results using the FMOLS and DOLS techniques. In the long run, the empirical results confirmed that the N-shaped EKC in Algeria is valid; electricity consumption and foreign direct investment directly impact ecological footprint. Even though the main objective of this study is to assess the N-shaped EKC, the novelty of the paper is the analysis of the interaction between FDI and electricity consumption. The empirical evidence reveals that FDI contributes to reducing the negative impact of fossil sources in the energy mix in Algeria through the transition to a cleaner energy mix pattern. In the final step of our analysis, we explore the causal nexus among variables by applying the Toda Yamamoto non-causality test. The Toda Yamamoto non-causality test reveals a unidirectional causality between economic growth and ecological footprint; one-run relationship flows from electricity consumption to ecological footprint, and economic growth leads to cause foreign-direct investment. These empirical results evidence the necessity of establishing suitable policies after the gold decade of the FDI in Algeria, being required to advance in this line to come back to ascending levels of FDI after the financial crisis of 2008 and the current COVID-19 crisis. In this sense, policymakers should consider the advantages of FDI for promoting clean foreign investment, necessary for reaching a transition to sustainable development in Algeria. In this sense, this study proposes a battery of environmental strategies to achieve this objective and sustainable growth in the country. Thus, policy implications and directions for future research are suggested. Graphical abstract

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Impacts of industrialization, renewable energy and urbanization on the global ecological footprint: A quantile regression approach

et al. 2022

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Debates on how growth and urbanization affect the environment have been intense, but they lack the global perspective. Therefore, this research examined those relationships, and to a greater extent other forms of global environmental degradation, such as foreign direct investment (FDI). It also explored the relationships between industrialization and technologies. The results, using Westerlund cointegration and quantile regressions over the period 1995-2017, show cointegration and regional heterogeneities in the environmental transmissions of economic development, industrialization, renewable energy, urbanization and FDI. The results show that economic development generates more environmental degradation in all quantiles at a global level, whereas urbanization and renewable energy reduce environmental degradation in all quantiles, with the highest effect being in the upper quantiles. On the other hand, industrialization affects the lower quantiles negatively and significantly but affects the upper quantiles positively. Finally, the empirical analysis supports the paradise haven or pollution halo hypothesis (PHH) for the 40th, 50th, 60th and 80th quantiles. This suggests that FDI inflows have a detrimental effect on the host country for these quantiles. Therefore, among the objectives of the policies are to give priority to more sustainable economic growth processes, which contribute to reducing environmental degradation, and furthermore to reinforce strict environmental laws on investment inflows and to build sustainable urbanization and industrialization processes for countries.

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Does foreign direct investments impair the ecological footprint? New evidence from the panel quantile regression

Cited by 53 publications

References 115 publications

Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach

Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach

Environmental strategies for achieving a new foreign direct investment golden decade in Algeria

Impacts of industrialization, renewable energy and urbanization on the global ecological footprint: A quantile regression approach

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