Environmental degradation in France: The effects of FDI, financial development, and energy innovations

Abstract

This paper explores the determinants of carbon emissions in France by accounting for the significant role played by foreign direct investment (FDI), financial development, economic growth, energy consumption and energy research innovations in influencing CO2 emissions function. In this endeavour, we employ the novel SOR ) unit root test on French time series data over the period 1955-2016 to examine the order of integration in the presence of sharp and smooth structural breaks in the variables. We also apply the bootstrapping bounds testing approach, recently developed by McNown et al. (2018), to investigate the presence of cointegration and the empirical findings underscore the presence of cointegration among the time series. Moreover, we find that FDI has a positive impact, while energy research innovations have a negative impact, on French carbon emissions. Financial development lowers carbon emissions, thereby improving the French environmental quality. FDI degrades the environment, and thus supports the pollution-haven hypothesis in France. Similarly, financial development suggests that financial stability is a required condition for improving environmental quality, so are energy research innovations. Contrarily, energy consumption is positively linked with carbon emissions. However, the relationship between economic growth and CO2 emissions is an inverted-U, which is a validation of the environmental Kuznets curve (EKC).

Panel heterogeneous distribution analysis of trade and modernized agriculture on CO2 emissions: The role of renewable and fossil fuel energy consumption

“…The outcome indicates that a 1% increase in agricultural value added decreases carbon dioxide emissions by 0.38%; a 1% increase in energy consumption increases carbon dioxide emissions by 0.96% and a 1% increase in trade openness increases carbon dioxide emissions by 0.44%. The empirical results are consistent with Shahbaz et al (2016Shahbaz et al ( , 2018. To compare our results with previous studies that utilized FMOLS technique, Liu et al (2017) indicated that a 1% increase in agricultural value added decreases per capita carbon emissions by 0.53%, whereas a 1% increase in per capita non-renewable energy increases per capita carbon dioxide emissions by 0.52% among four ASEAN countries.…”

“…The empirical results are consistent with Shahbaz et al . (, ). To compare our results with previous studies that utilized FMOLS technique, Liu et al .…”

The technical decomposition of carbon emissions and the concerns about FDI and trade openness effects in the United States

“…According to the previous literature, per capita income is the primary driver of carbon dioxide emissions (Jaunky, 2011;Narayan and Narayan, 2010;Shahbaz et al, 2018). At this stage, the effects of income on carbon dioxide emissions can be explained by three effects (Tsurumi and Managi, 2010;Yin et al, 2015).…”

Unleashing the Indirect Influence of FDI in Environmental Degradation via Financial Development and Economic Growth. New Evidence from Asian Countries

“…However, our research depicted that EG is not a signi cant mediator between FDI and ED in the Asian regions. Unlike Shahbaz, Nasir and Roubaud, [135] who claimed that FDI signi cantly improves economic propensity and development that is vital for sustainability and environmental quality. Our study states that EG is not a signi cant mediator but FDI directly in uences ED in the Asian regions.…”

“…Additionally, Otchere, Soumaré and Yourougou [134] revealed that FDI plays a backbone role in the productive sector and improves the production level of various industries because they receive adequate nancial resources. In turn, FD signi cantly improves environmental quality [135]. Sirag, SidAhmed and Ali [136] claimed that the relationship between FDI and economic performance is affected by FD in many nations.…”