Foreign Direct Investment and Carbon Emission Efficiency: The Role of Direct and Indirect Channels

Wang, Qizhen; Zhang, Qian

doi:10.3390/su142013484

Cited by 14 publications

(9 citation statements)

References 68 publications

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“…Another reason for a positive association between FDI and GHG could be the role of the former in stimulating industrial activity and the surge in energy consumption leading to an increase in the latter. FDI has an adverse effect on ES by affecting carbon emission efficiency [60,61].…”

Section: Economic Policy Uncertainty-ghg Model Resultsmentioning

confidence: 99%

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Nan,

He,

Solangi

et al. 2023

Sustainability

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The comparative analysis of the effect of economic policy uncertainty on environmental sustainability is imperious as it can provide critical insights into the link between economic policies and environmental sustainability. Economic policy uncertainty may have different impacts in different economies. The present study provides a comparative analysis of the effect of economic policy uncertainty on environmental sustainability in developed and emerging economies. The study employs pooled ordinary least squares and panel quantile regression to analyze data from 2001 to 2019. Moreover, the study also compares the impact of economic policy uncertainty on environmental sustainability across two different econometric methods. It also compares the results across different quantiles of the distribution of variables. Moreover, the study includes the agriculture output, renewable energy consumption, and foreign direct investment in the model. The results show that economic policy uncertainty negatively and significantly impacts environmental sustainability as it increases GHG emissions. Moreover, agriculture output increases GHG emissions in developed economies at higher quantiles. Furthermore, the results also confirm the pollution haven hypothesis, while renewable energy consumption has a positive effect on environmental sustainability as it significantly reduces GHG emissions. The study stresses that governments should take measures to minimize economic policy uncertainty to improve environmental sustainability. In addition, effective policies to enhance openness in the policymaking process and offer long-term policy certainty and foster more stable investment conditions would encourage renewable energy and reduce GHG emissions.

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Section: Economic Policy Uncertainty-ghg Model Resultsmentioning

confidence: 99%

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Nan,

He,

Solangi

et al. 2023

Sustainability

View full text Add to dashboard Cite

show abstract

“…The results indicate that FDI reduces CO2 emissions in the long run. Wang and Zhang (2022) measured the effect of FDI on carbon emission efficiency in China. The authors find that FDI harms carbon emissions.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Paramati et al (2017) examined the effect of stock market growth on CO2 emissions per capita in the case of G20 countries. The results indicate that FDI reduces CO2 emissions in the long run Wang and Zhang (2022). measured the effect of FDI on carbon emission efficiency in China.…”

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confidence: 92%

Foreign direct investment and carbon emissions in ECOWAS: does good governance matter?

Limazie,

Woni

2024

JED

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PurposeThe present study investigates the effect of foreign direct investment (FDI) and governance quality on carbon emissions in the Economics Community of West African States (ECOWAS).Design/methodology/approachTo achieve the objective of this research, panel data for dependent and explanatory variables over the period 2005–2016, collected in the World Development Indicators (WDI) database and World Governance Indicators (WGI), are analyzed using the generalized method of moments (GMM). Also, the panel-corrected standard errors (PCSE) method is applied to the four segments of the overall sample to analyze the stability of the results.FindingsThe findings of this study are: (1) FDI inflows have a negative effect on carbon emissions in ECOWAS and (2) The interaction between FDI inflows and governance quality have a negative effect on carbon emissions. These results show the decreasing of environmental damage by increasing institutional quality. However, the estimation results on the country subsamples show similar and non-similar aspects.Practical implicationsThis study suggests that policymakers in the ECOWAS countries should strengthen their environmental policies while encouraging FDI flows to be environmentally friendly.Originality/valueThe subject has rarely been explored in West Africa, with gaps such as the lack of use of institutional variables. This study contributes to the literature by drawing on previous work to examine the role of good governance on FDI and the CO2 emission relationship in the ECOWAS, which have received little attention. However, this research differs from previous work by subdividing the overall sample into four groups to test the stability of the results.

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“…The negative impact of FDI Inward FDI strengthens domestic competition and leads to the technological innovation of similar domestic enterprises, thus increasing carbon emission efficiency and reducing environmental pollution. On the other hand, especially for developing countries, the spillover effect of advanced technology and experience from inward FDI on their upstream and downstream industries increases labor productivity and eventually achieves green growth [23]. On the contrary, production activities at the bottom of the global value chain not only have low added value, but most have greater negative impact on the environment.…”

Section: The Impact Of Fdi On Gtfpmentioning

confidence: 99%

FDI or International-Trade-Driven Green Growth of 24 Korean Manufacturing Industries? Evidence from Heterogeneous Panel Based on Non-Causality Test

2023

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Manufacturing, as an energy-intensive industry, plays a major role in economic growth. Its green growth is the focus of national planning for sustainable development, especially for a country such as Korea, which has a scarcity of fossil energy of its own. While internationalization has brought Korea scarce energy, serious carbon emissions have become a pressing issue. It is still necessary to explore the relationship between globalization and green growth in manufacturing. Thus, our paper aims to observe their relationship by using 24 manufacturing industries from 2011 to 2019. Through the panel Granger non-causality test and the Dumitrescu–Hurlin test, we find that imports and inward foreign direct investment (FDI) causes green growth at the overall manufacturing level, but their causality relationships exist in different industries. The green-growth causality relationship of inward FDI mainly exists in capital-intensive and internationally competitive manufacturing industries (manufacture industries of basic metals; furniture; food products; coke, briquettes, and refined petroleum products; and chemicals and chemical products, except pharmaceuticals and medicinal chemicals). Furthermore, the green-growth causality relationship of imports primarily exists in the fossil-energy-consumption-intensive manufacturing industry (manufacture industries of motor vehicles, trailers, and semitrailers and coke, briquettes, and refined petroleum products). Furthermore, in our regression analysis, we find that only inward FDI robustly promotes the Korean manufacturing sector’s green growth; the positive effect is in the range from 0.005 to 0.009. Though the parameter estimates are positive and significant for FDI, they are close to zero, suggesting very limited positive effects that are close to almost zero. Conversely, imports have no significant impact, which we speculate is related to the import structure of Korea. Hence, the Korean manufacturing development model suggests that developing countries with similar country characteristics need to develop and guide the formation of capital-intensive and competitive industries. Additionally, it is imperative to decarbonize energy-intensive industries and to work on renewable energy development and diffusion. Finally, it is essential to introduce various green monitoring mechanisms to reduce carbon emissions. The government needs to strengthen its support for research and development of innovative technologies to reduce carbon emissions as well as promote the development of environmental and energy-saving related professional service enterprises.

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Foreign Direct Investment and Carbon Emission Efficiency: The Role of Direct and Indirect Channels

Cited by 14 publications

References 68 publications

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Comparative Analysis of the Impact of Policy Uncertainty, Agricultural Output, and Renewable Energy on Environmental Sustainability

Foreign direct investment and carbon emissions in ECOWAS: does good governance matter?

FDI or International-Trade-Driven Green Growth of 24 Korean Manufacturing Industries? Evidence from Heterogeneous Panel Based on Non-Causality Test

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