Exploring Environmental Kuznets Curve and Pollution Haven Hypothesis in Bangladesh: The Impact of Foreign Direct Investment

Abstract

Bangladesh receives the second-most foreign direct investment in South Asia. Over the past 30 years, Bangladesh's economy has expanded tremendously because of increased investment from several foreign countries. Although it can be beneficial in certain ways including the generation of new jobs, the improvement of infrastructure, and the equalization of economic rewards across the population; foreign direct investment has unintended consequences, such as ecological damage. In light of this, it is worth exploring the effects of foreign direct investment on sustainable development in Bangladesh. Using the most up-to-date annual data between 1990 and 2019, this study investigated the evidence of the Environmental Kuznets Curve and the Pollution Haven Hypothesis in Bangladesh. To assess the effects of economic growth, foreign direct investment, energy use, and trade on carbon dioxide emissions, this research employed the autoregressive distributed lag method. The empirical results indicated that the country has an inverted U-shaped Environmental Kuznets Curve and the adverse impact of foreign direct investment on the environment confirmed the validity of the Pollution Haven Hypothesis in Bangladesh. The results paint a bleak picture, sounding an alarm for policymakers to pay closer attention to the ways in which development leads to increased carbon emissions and how multinational companies operating within the country worsen the situation. That's why it's important to subject foreign investors to stringent environmental regulations. In addition, the nation's economic expansion should be guided by sustainable development goals.

Impacts of FDI and Environmental Pollution in ASEAN Countries: The Role of Institutions

“…The test results show that FDI has a positive impact on CO 2 emissions in the case of ASEAN countries. This result is like previous studies such as (Li et al, 2019), (Gong et al, 2021), (Abdo et al, 2020), (Wang et al, 2020) (Raihan, 2023). In the context of fast economic growth, environmental problems are becoming more and more acute in ASEAN countries, so this result also warns ASEAN countries about the harmful effects of FDI inflows, first, the risk of of the trend of shifting dirty industries from other countries Nation.…”

“…Regarding the impact of FDI on environmental pollution, studies by (Li et al, 2019), (Gong et al, 2021), (Abdo et al, 2020), (Wang et al, 2020) (Raihan, 2023)… all support the "pollution paradise" hypothesis when arguing that FDI is one of the causes of environmental quality deterioration in the host country. Most recently, Gong et al (2021) used data from countries along the "One Belt, One Road" as the sample and discovered that developing countries such as South Africa and Malaysia are still "polluted paradise."…”

“…Findings support the existence of pollution haven hypothesis in the Arab countries. The direct effect of the FDI is increased CO 2 pollution haven hypothesis and the pollution halo hypothesis are not contradictory when the institutional quality is taken into consideration Raihan (2023). using the most up-to-date annual data between 1990 and 2019, this study investigated the evidence of the Environmental Kuznets Curve and the Pollution Haven Hypothesis in Bangladesh.…”

A review of agroforestry as a sustainable and resilient agriculture

“…Numerous agroforestry practices demonstrate a high degree of resemblance to the characteristics and dynamics of early successional forests. The mitigation of climate change is furthered by the adoption of an additional significant strategy, namely the reduction of fossil fuel consumption (Raihan & Tuspekova, 2022g;Raihan, 2023h;Raihan, 2024b). The utilization of bioenergy presents a potential solution for mitigating reliance on fossil fuels (Raihan, 2023i;2023j).…”

Dose institutional quality influences the relationship between urbanization and CO2 emissions?

“…he results of the study suggest that adopting the MPH model in Nigeria could lead to increased economic growth, improved competitiveness, and reduced poverty and inequality. [ 48 ] Using the most up-to-date annual data between 1990 and 2019, this study investigated the evidence of the Environmental Kuznets Curve and the Pollution Haven Hypothesis in Bangladesh. The empirical results indicated that the country has an inverted U-shaped Environmental Kuznets Curve and the adverse impact of foreign direct investment on the environment confirmed the validity of the Pollution Haven Hypothesis in Bangladesh.…”