Does FDI and economic growth harm environment? Evidence from selected West African countries

Halliru, Ahmed Malumfashi; Loganathan, Nanthakumar; Hassan, Asan Ali Golam

doi:10.1080/19186444.2020.1854005

Cited by 30 publications

(24 citation statements)

References 72 publications

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“…Thus, the results point that building of more foreign and local companies in this economic group has contributed to the creation of more jobs for the local residents which has led to the movement of individuals from the rural areas to the urban areas. The positive impact of FDI on CO 2 emissions in all panel clusters is in accordance with the output obtained by Halliru et al (2021) for the same ECOWAS community. Their empirical findings unveiled that FDI increases CO 2 emissions within the ECOWAS community.…”

Section: Discussion Of Resultssupporting

confidence: 86%

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

Abban

Yao

et al. 2021

Environ Dev Sustain

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The vision of every country or subregions is to achieve economic growth and sustainable economic growth. Thus, the Economic Community of West African States (ECOWAS) as an economic cooperation renders interaction among 16 relevant countries to increase economic development. However, CO 2 emissions as a result of economic growth are of great concern. Thus, this study delves into the determinants of CO 2 emissions along the ECOWAS community, taking into consideration if countries are energy exporters or energy importers. The analytical procedure applied indicated the presence of heterogeneity in the slope coefficient and cross-sectional dependencies across the various panels. Applying the Westerlund bootstrap co-integration unveiled, the employed variables have a long-run equilibrium association. The results from the augmented mean group (AMG) revealed that the contribution weight (order of importance) to CO 2 emissions varies across panel clusters. Finally, the causality results unveil a bidirectional causation in all panels between urbanization and CO 2 emissions, whereas foreign direct investment and CO 2 emissions have a bidirectional effect in energy importers and the main panel. These results obtained indicate that foreign direct investment, urbanization, energy consumption, trade openness, and gross domestic product are the determinants of CO 2 emissions along the community. Based on the outcome, the suggested policy implications indicate that (a) the need for a paradigm shift from fossil fuel sources to renewables be encouraged in the community and (b) again, the awareness of spillover of economic growth and energy transition on CO 2 emissions from foreign companies to local businesses must be promoted.

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Section: Discussion Of Resultssupporting

confidence: 86%

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

Abban

Yao

et al. 2021

Environ Dev Sustain

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“…We, however, recommend that with robust, sustainable environmental policies and a legal quality regime, the effect of FDI inflow on CO 2 emissions can be mitigated in line with the Sustainable Development Goals (SDGs). The findings of this study are consistent with the findings in the recent literature on the FDI-CO 2 emissions nexus (Acheampong et al, 2019;Ahmad et al, 2016;Ahmadalipour et al, 2019;Halliru et al, 2021;Ibrahim & Ajide, 2021;Khan et al, 2021;Sahbi & Shahbaz, 2014;Shahbaz et al, 2019;Solarin et al, 2018;Vitenu-Sackey, 2020) The remainder of this study is structured in the following order. In Section 2, the study will discuss the relevant literature underlying the problem statement.…”

Section: Introductionsupporting

confidence: 90%

“…The 381 latter appears to be a determining factor in the choice of foreign investors in African countries. This result 382 matches that of ( Ahmadalipour et al, 2019;Halliru et al, 2021;Ibrahim & Ajide) who indicated that economic 383 growth is an important determinant in explaining FDI flows.…”

supporting

confidence: 79%

“…However, the empirical validation of the pollution haven hypothesis has mostly depended on the empirical methodology adopted, the kind and sector of the foreign direct investment (FDI), and the pollutant examined. Some empirical studies have mentioned that the effect of the pollution is dependent on the variations in the technological frontiers of the multinationals and the host country (Dean et al, 2009;Sibanda & Ndlela, 2019;Vitenu-Sackey, 2020); the quality and regulatory framework of environmental and sustainability policies (Halliru et al, 2021;Kheder & Zugravu, 2012); availability and quality of natural resources in the host country (Dam & Scholtens, 2012;Petrović-Ranđelović et al, 2020); and most probably institutional quality, corruption and the rule of law (Manderson & Kneller, 2012).…”

Section: Literature Reviewmentioning

confidence: 99%

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CO2 Emissions, Legal Strength & Environmental Sustainability Policies; And FDI Nexus In Sub-Saharan Africa

Asiedu

Aboagye

Arthur

et al. 2022

Preprint

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The study employed the two steps systems GMM technique to examine the effect of FDI inflow in 54 countries in Africa from 2004 -2020. The effects of FDI on the economy and growth are positive, provided that policymakers meet minimum conditions. The advantages of FDI are conditioned by the ability of the host country to assimilate technologies and by a local environment that is secure and transparent. The effects of FDI on the environment are inescapable. The results show that there is indeed a positive relationship between FDI inflows and CO2 emissions in Africa. The results also show that the intensity of CO2 emissions does depend on the increase in GDP growth (economic growth). However, with robust, sustainable environmental policies and legal quality, the effect of FDI inflow on CO2 emissions can be mitigated.

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“…In addition, the results reveal that FDI inflows are substantially positively affecting CO 2 emissions. On the contrary, in the Economic Community of West African States (ECOWAS), the large amount of FDI towards the oil, mining and agriculture sectors, has put strong pressure on the environment [29].…”

Section: Brief Literature Reviewmentioning

confidence: 99%

Foreign Direct Investment and Environmental Quality: Revisiting the EKC in Latin American Countries

2021

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In this study we aim to test the effects of foreign direct investment (FDI) on carbon emissions (CO2) in 20 Latin American countries during the period of 1990–2018. Based on the atlas method of the World Bank, we divided the countries into three groups according to their real gross national income per capita: high-income, upper-middle-income and lower-middle-income countries. We used cointegration techniques and causality tests to evaluate the relationship between the variables. To assess the strength of the cointegration vector, we applied the dynamic ordinary least squares (DOLSs) model for individual countries and the dynamic panel ordinary least squares (PDOLSs) model for groups of countries. The results suggest that the entry of FDI into Latin American (LA) countries increases CO2 emissions, affecting the environmental quality. These findings disagree with the environmental Kuznets curve (EKC) hypothesis but, in contrast, they are in line with the pollution haven hypothesis (PHH). Moreover, we show evidence in long-term equilibrium relationship between FDI input and CO2 emissions, which is not the case for the short-term equilibrium. Some additional results suggest that FDI flows do not cause the CO2 emissions in LA countries. The empirical findings suggest policymakers to design policies to “the second-best theory”, targeting FDI flows to their economies to solve economic problems in the short term, but thereafter they may guarantee the reduction in environmental pollution, based on environmentally responsible FDI and stronger regulations. In other words, the transition from a pollution haven to the applicability of the environmental Kuznets curve (EKC). This study contributes with scarce empirical evidence for LA countries in this issue.

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Does FDI and economic growth harm environment? Evidence from selected West African countries

Cited by 30 publications

References 72 publications

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

CO2 Emissions, Legal Strength & Environmental Sustainability Policies; And FDI Nexus In Sub-Saharan Africa

Foreign Direct Investment and Environmental Quality: Revisiting the EKC in Latin American Countries

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Does FDI and economic growth harm environment? Evidence from selected West African countries

Cited by 30 publications

References 72 publications

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

The nexus amid foreign direct investment, urbanization, and CO2 emissions: Evidence from energy grouping along the ECOWAS community

CO2 Emissions, Legal Strength &amp; Environmental Sustainability Policies; And FDI Nexus In Sub-Saharan Africa

Foreign Direct Investment and Environmental Quality: Revisiting the EKC in Latin American Countries

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CO2 Emissions, Legal Strength & Environmental Sustainability Policies; And FDI Nexus In Sub-Saharan Africa