FDI, Green Innovation and Environmental Quality Nexus: New Insights from BRICS Economies

Abstract

One major concern about foreign direct investment (FDI) is the potential negative environmental impact due to increased CO2 emissions. However, there is a possibility that FDI mitigates CO2 emissions through green innovation and creates a cleaner environment. In the existing literature, there is no significant empirical evidence on the linkage among FDI, green innovation and CO2 emissions in the context of BRICS countries. Hence, this study aims to analyze the impact of FDI and green innovation on the environmental quality of BRICS economies for 1990–2014. The study employed Augmented Mean Group (AMG) estimators for empirical data analysis. The study’s findings depict that foreign direct investment, energy use, and economic growth have a significant and positive impact on the CO2 emissions of BRICS economies. Moreover, green innovation has a significant inverse impact on CO2 emissions. The results show bidirectional causalities between CO2 emissions and green innovation, trade openness and CO2 emissions, energy use and CO2 emissions, and urbanization and CO2 emissions. Additionally, the findings reveal a one-way causality from CO2 emissions to GDP and CO2 emissions to urbanization. This study offers essential policy recommendations for the environmental sustainability of BRICS countries through green innovation.

Influence Mechanism of High-Tech Industrial Agglomeration on Green Innovation Performance: Evidence from China

“…The existing research on the influencing factors of green innovation performance mainly analyzes them from the perspectives of the economic development level [38], corporate ethics environment [39,40], environmental regulation [41,42], R&D investment [43], FDI [44,45] and so on. Although there is some research on the relationship between hightech industry agglomeration and green innovation performance, there are great differences.…”

Corporate Co-Agglomeration and Green Economy Efficiency in China

“…The fourth control variable is foreign direct investment (fdi) as this can affect regional innovative development and improve environmental quality (He, 2005 ; Ali et al, 2022 ) or can have a “pollution haven” effect [it refers to the tendency of companies in the industry to establish themselves in countries or regions where environmental standards are relatively low] (List and Co, 1999 ; Nguyen, 2021 ).…”

From Stockholm 1972 to 2022: Holistic and multidisciplinary approach by India to attain sustainability

“…Institutional factors directly affect the environment and indirectly affect through Foreign Direct Investment (FDI) and economic growth (Ahmed et al, 2022;Phoungthong et al,2022). There is a need to formulate and implement stringent environmental laws and policies which promote green growth and achieve sustainability without affecting FDI (Li et al, 2019;Ali et al, 2022). There is a strong correlation between institutional factors and CO 2 emission and has to be considered by economists, policy makers and environmentalists to formulate and implement Environmental Laws (Jiang et al, 2022;Zhang et al, 2022).…”

“…Agenda 21 provides a long-term vision for sustainable development which aims to keep a balance between social and economic needs, conservation and management of natural resources, without harming the ecosystems(Ali et al 2022).…”