The moderating effect of foreign direct investment on environmental degradation-poverty reduction nexus: evidence from sub-Saharan African countries

Akinlo, Taiwo; Dada, James Temitope

doi:10.1007/s10668-021-01315-1

Cited by 47 publications

(26 citation statements)

References 67 publications

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“…The three indicators are carbon dioxide (CO2) per capita (measured in parts-per-million, ppm), methane emissions (kt of CO2 equivalent) and nitrous oxide emissions (thousand metric tons of CO2 equivalent). CO2 emission is chosen as proxy for environmental pollution since it is the most commonly used proxy in the literature (Chen et al , 2018; Huynh, 2020; Aluko and Obalade, 2020; Akinlo and Dada, 2021). Presently, CO2 is the most “popular” source of pollution and greenhouse gas in developing countries which is one of the major concerns of environmentalists and policymakers (Dhrifi et al , 2019).…”

Section: Methodsmentioning

confidence: 99%

Shadow economy, institutions and environmental pollution: insights from Africa

Dada

Ajide

Sharimakin³

2021

WJSTSD

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PurposeThis study investigates the effect of shadow economy on environmental pollution and the role of institutional quality in moderating the impact in African countries between 1991 and 2015.Design/methodology/approachThe study employs three pollutant variables namely: carbon dioxide emissions per capita, methane emission and nitrous oxide emission as robustness check. Also, battery of methodologies; ordinary least squares, fixed effects and system generalised method of moments are used to drive out the conclusions of this study.FindingsThe findings reveal that shadow economy and institutional quality contribute significantly to environmental pollution in Africa. Further, the interactive effect of shadow economy and institutional quality worsens environmental quality in the region. This reveals that weak institutional quality recorded in the region increases the level of shadow economy, thereby intensifying environmental pollution.Practical implicationsThe study concludes that weak institutional framework in the region reinforces shadow economy and environmental pollution. Hence, findings from this study can help policymakers in the region to better understand the role of institutional quality in reducing shadow economy and environmental pollution.Originality/valueThis study enriches one’s understanding on the role of institutional quality in the relationship between environmental quality and shadow economy in African context. It investigates the direct and indirect impact of institutions and shadow economy on environmental quality. The study also uses three different robust variables to measure environmental pollution (carbon dioxide (CO2) emissions per capita, methane emission and nitrous oxide emission) for sensitivity analysis.

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Section: Methodsmentioning

confidence: 99%

Shadow economy, institutions and environmental pollution: insights from Africa

Dada

Ajide

Sharimakin³

2021

WJSTSD

Self Cite

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“…These mixed results generated criticisms that the EKC framework failed to consider other structural, institutional, and macroeconomic variables that tend to influence the environment. Furthermore, recent studies have incorporated structural, institutional, and macroeconomic variables in testing the EKC hypothesis using CO 2 emission, nitrogen dioxide (NO2), sulphur dioxide, industrial waste, water pollution, threatened species, and deforestation to measure environmental degradation (Kubicova, 2014; Opoku and Boachie, 2020; Dada and Ajide, 2021; Akinlo and Dada, 2021; Dada and Akinlo, 2021). Nevertheless, these proxies only capture part of the environmental pollution; that is they do not represent the entire human activities on the environment.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Third, most studies in the environment literature measure environmental quality using CO 2 emission (Akinlo and Dada, 2021; Dada et al , 2021a, b; Huynh and Ho, 2020; Hanif, 2018). This measure is limited and weak in measuring environmental quality since it only measures air contamination and not total human activities on the environment (Usman and Hammar, 2021; Usman et al , 2022).…”

Section: Introductionmentioning

confidence: 99%

Financial development–ecological footprint nexus in Malaysia: the role of institutions

Dada

Adeiza

Ismail

et al. 2022

MEQ

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PurposeMotivated by the conflicting evidence on the effect of financial development on environmental quality, this study investigates the moderating role of institutional quality in the link between financial development and environmental quality using a robust proxy in Malaysia from 1984 to 2017.Design/methodology/approachEcological footprint is used to measure environmental quality, while financial development is proxied using three measures (domestic credit provided by the private sector, domestic credit provided by the financial sector and domestic credit provided by the banking sector). An index of institutional quality is generated from voice and accountability, government effectiveness, regulatory quality, rule of law and control of corruption. Autoregressive Distributed Lag Bounds Test, Fully Modified Ordinary Least Square and Canonical Cointegrating Regression were used as the estimation techniques.FindingsThe results show that financial development, institutional quality, economic growth and foreign direct investment improve environmental quality in the short run, whereas trade openness and natural resources worsen it. In the long run, financial development, institutional quality, economic growth, trade openness and natural resources deteriorate the environment. Furthermore, findings from the interactive term suggest that institutions and financial development complement each other to affect the environment in the short run. However, institutions and financial development perform a substitutability role in influencing the environment in the long run.Practical implicationsThe outcome of this study suggests that there are time lags in the relationship between institutional quality, financial development and ecological footprint in Malaysia. Furthermore, the study offers important policy implications to policymakers in Malaysia and other developing countries on how to mitigate environmental degradation.Originality/valueThis study contributes to the body of knowledge on the moderating role of institutional quality in the relationship between financial development and ecological footprint in Malaysia. It examines the direct and indirect effects of financial development on environmental degradation through institutional quality, which have received less attention in the context of Malaysia. The findings from this study are robust to different proxies and estimation techniques.

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“…This indicates that electricity usage increases environmental degradation, which is in line with (Lawson, 2020) and (Kwakwa, 2021 In terms of other variables, like foreign direct investment, the outcomes obtained from Table 4 demonstrate that FDI has a negative effect on CO 2 emissions but is statistically inconsequential in the short and long run, which is consistent with recent outcomes of (Acheampong et al, 2019). This nding contradicts the outcomes of (Akinlo & Dada, 2021), who discovered that FDI raises carbon emissions in Sub-Saharan Africa(SSA). Several different scenarios explain these outcomes.…”

Section: Outcomes Of Dynamic Stimulated Ardl Simulationmentioning

confidence: 58%

Dynamic Nexus Among CO2 Emissions, Fossil Energy Usage and Human Development in East Africa: New Insight From Novel DARDL Simulations

Dumor

Kursah

et al. 2021

Preprint

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This study investigates the relationship among CO2 emissions, human development index, and fossil energy usage. Essentially, the study was informed by the Sustainable Development Goal 7, which stipulates universal access to renewable and contemporary energy technologies. We employed the novel dynamic autoregressive-distributed lag (DARDL) simulations with a dataset spanning between1980 and 2020 from East Africa Community (EAC). The study revealed that human development, access to electricity, and trade have a strong correlation with carbon emissions in the long term, whereas fossil energy usage and economic growth have a negative connection with carbon emission. On the other hand, in the short run, human development and fossil energy usage have a positive correlation with carbon emission, while economic growth and foreign direct investment have a negative correlation with carbon emission. Thus, policies that are tailored to enhance the political environment in East Africa are crucial to ensuring realistic access to clean and modern electricity.

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The moderating effect of foreign direct investment on environmental degradation-poverty reduction nexus: evidence from sub-Saharan African countries

Cited by 47 publications

References 67 publications

Shadow economy, institutions and environmental pollution: insights from Africa

Shadow economy, institutions and environmental pollution: insights from Africa

Financial development–ecological footprint nexus in Malaysia: the role of institutions

Dynamic Nexus Among CO2 Emissions, Fossil Energy Usage and Human Development in East Africa: New Insight From Novel DARDL Simulations

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