The Dynamic Interrelationship of Environmental Factors and Foreign Direct Investment: Dynamic Panel Data Analysis and New Evidence from the Globe

Abstract

Studies on the role of renewable energy consumption and other environmental factors in carbon emission have got considerable attention recently, and they are predicted to get exaggerated in the coming decades. Energy usage increases economic growth and development of a country and backs to global warming and carbon emission which affect the local environment. For the prosperity of a country, it is felt crucial to measure the unavoidable impacts which effect environmental quality. Consequently, the current study investigates the interrelationship of renewable energy consumption, carbon dioxide emission, foreign direct investment, and economic growth in 190 countries of the world for the period of 1980 to 2018. By employing both static and dynamic models, the findings indicate that carbon emission, renewable energy consumption, foreign direct investment, and economic growth affect each other significantly whereas renewable energy consumption has been found beneficial for environmental quality; however, it decreases the inflow of FDI. RE has a decreasing impact, while FDI and carbon emission promote economic growth. The study suggests the promotion of renewable energy resources and policies related to FDI to promote the quality of the environment and achieve economic growth as well.

Institutions Powers, financial development and environmental factors influence on Carbon emission: Evidence from a Global Perspective

“…The findings suggest countries on the promotion of renewable energy sources and eliminating energy from fossil fuels to achieve high quality of environment. These findings are in line with those of (Apergis & Payne, 2010) ,(H. , (H. Khan, Khan, Kim Oanh, & Lin, 2020) and (Jebli, Youssef, & Ozturk, 2016). These findings evidence that renewable energy consumption is ecofriendly environment and mitigates carbon emission.…”

Analyzing Renewable and Nonrenewable Energy Sources for Environmental Quality: Dynamic Investigation in Developing Countries

“…On the contrary, Khan et al [43] examined energy consumption, the inflow of foreign direct investment, and carbon emissions in the global countries. ey found the interinfluence of these variables on each other, while the consumption of renewable energy has reduced carbon emissions and, at the same time, reduced the inflow of FDI.…”

Renewable Energy Consumption, Trade Openness, and Environmental Degradation: A Panel Data Analysis of Developing and Developed Countries

“…In addition, [32] found a long-term relationship between economic growth, carbon emission, and renewable energy consumption. Khan et al [7] have studied renewable energy consumption and carbon emission in the global panel. eir findings show the negative impact of renewable energy on carbon emission while they have found positive impact of financial development on carbon emission.…”

“…ese studies have found that the use of renewable energy consumption reduces carbon emissions [4,5]. Similarly, Khan et al [6] and Khan et al [7] argue that the use of renewable energy from renewable energy sources instead of energy consumption from fossil fuels enhances environmental quality and reduces carbon emission. e impact of tourism has also been investigated by several researchers as it plays a very important role in economic growth and affects environmental quality such as [8] who claim that increase in tourism activities brings increase in climate change and energy consumption.…”