Foreign direct investments and environmental quality in sub-Saharan Africa: the merits of policy and institutions for environmental sustainability

Duodu, Emmanuel; Kwarteng, Evans; Oteng-Abayie, Eric Fosu; Frimpong, Prince Boakye

doi:10.1007/s11356-021-15288-1

Cited by 33 publications

(35 citation statements)

References 60 publications

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“…Some studies support the hypothesis that FDI with modern and efficient technology reduces CO2 emissions (see Saud et al, 2019;Adams et al, 2020;Hao et al, 2020). Recently, Bulus and Koc (2021) and Duodu et al (2021) demonstrated that FDI enhances environmental quality as FDI was revealed to affect CO2 emissions negatively in Korea and SSA, respectively. In the case of Duodu et al (2021), FDI enhances environmental quality on the condition that there exist stringent policies and institutions for environmental sustainability.…”

Section: Pollution Halo Hypothesismentioning

confidence: 86%

“…Thus, financial development makes access to funds for investment easy and, in turn, increases the investment level within a given economy and hence higher GDP (gross domestic product), which determines the income of a given economy. We thus present the augmented STIRPAT model by incorporating other variables following Duodu et al (2021) as follows:…”

Section: Identification and Estimation Methodsmentioning

confidence: 99%

“…Recently, Bulus and Koc (2021) and Duodu et al (2021) demonstrated that FDI enhances environmental quality as FDI was revealed to affect CO2 emissions negatively in Korea and SSA, respectively. In the case of Duodu et al (2021), FDI enhances environmental quality on the condition that there exist stringent policies and institutions for environmental sustainability. Considering that environmental policies for pollution reduction depend on good institutions, studies have proven empirically that good institutions complement FDI to reduce CO2 emissions.…”

Section: Pollution Halo Hypothesismentioning

confidence: 99%

“…All other sample variables are extracted from World Development Indicators (World Bank, 2020). The sample variables are based on past studies (Aziz, 2018;Asiamah et al, 2019;Contractor et al, 2020;Duodu et al, 2021). Table 1 presents a brief description of the variables used in the estimations.…”

Section: Data Variable and Sample Selectionmentioning

confidence: 99%

“…, 2020). Recently, Bulus and Koc (2021) and Duodu et al. (2021) demonstrated that FDI enhances environmental quality as FDI was revealed to affect CO2 emissions negatively in Korea and SSA, respectively.…”

Section: Related Literaturementioning

confidence: 99%

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The impact of the Compact with Africa initiative on foreign direct investments and environmental pollution

Duodu

Oteng-Abayie

Frimpong

et al. 2022

MEQ

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PurposeThis study is motivated by the Compact with Africa (CWA) initiative to promote foreign direct investment (FDI) in Africa. However, FDI is argued to be one of the primary causes of environmental pollution (CO2 emissions). In that regard, this study estimates the impact of the CWA initiative on FDI and environmental pollution.Design/methodology/approachThe study utilized the difference-in-difference (DID) and triple difference (DDD) estimation strategies to examine the causal impact of the CWA initiative on FDI and environmental pollution from 2005 to 2019. The study selected nine CWA countries and nine non-CWA countries as treatment and control samples.FindingsThe authors found that the CWA initiative positively promotes FDI in the participant countries compared to non-participant countries. The CWA initiative also promoted environmental pollution in the CWA countries compared to non-CWA countries. Furthermore, the DDD estimates show that the effect of the CWA initiative on environmental pollution is through FDI.Practical implicationsThe authors recommend policies to attract environmentally friendly FDI for both Compact and non-Compact economies.Originality/valueThe study is the first to provide empirical evidence on the CWA initiative on FDI and environmental pollution in Africa. The study used a quasi-experimental method on the relationship between FDI and environmental pollution in Africa.

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Section: Pollution Halo Hypothesismentioning

confidence: 86%

Section: Identification and Estimation Methodsmentioning

confidence: 99%

Section: Pollution Halo Hypothesismentioning

confidence: 99%

Section: Data Variable and Sample Selectionmentioning

confidence: 99%

Section: Related Literaturementioning

confidence: 99%

See 3 more Smart Citations

The impact of the Compact with Africa initiative on foreign direct investments and environmental pollution

Duodu

Oteng-Abayie

Frimpong

et al. 2022

MEQ

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Do environmental regulations and technological innovation enhance environmental well‐being in sub‐Saharan Africa?

Manu,

Chen,

Adomako

2024

Bus Strat Env

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We investigate the regulation–technology–environment nexus in sub‐Saharan Africa (SSA), one of the world's most rapidly growing regions. Using a comprehensive panel dataset consisting of 32 countries from 2000 to 2022, we find that stronger environmental regulations and technological innovation enhance environmental well‐being. Moreover, we identify that stronger environmental regulations positively affect pro‐environment innovation. Finally, we present clear evidence for a dynamic and nonlinear regulation–technology–environment relationship, ruling out one‐size‐fits‐all policy approaches to environmental well‐being. Our results remain robust to different estimators, measurements, and sample selections.

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Business cycle synchronization and sustainable trade development in Africa: The role of capital mobility

Abendin,

Naatu,

Khan

et al. 2024

Sustainable Development

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The literature has overlooked the significance of business cycle synchronization in sustainable trade development, particularly with regard to trade‐adjusted carbon emissions. Further, how capital mobility affect the nexus between business cycle synchronization and sustainable trade development is an area that is yet to be explored. This paper examines the role of capital mobility in the nexus between business cycle synchronization and sustainable trade development using the panel corrected standard errors model in 30 African economies for the period 2006–2020, thus addressing the gaps in the previous studies. We concluded that: First, the direct effects of business cycle synchronization worsen sustainable trade development in Africa. Second, capital mobility promotes sustainable trade development in Africa. Third, capital mobility may be a viable instrument to mitigating the detrimental effects of synchronized business cycles on the sustainable trade development in Africa. Fourth, our research contributes to the extant literature by determining the threshold at which capital mobility can affect the association between synchronized business cycles and sustainable trade growth. Fifth, our study revealed that business cycle synchronization and capital mobility have a causal relationship with sustainable trade development in Africa. The concluding remarks section includes policy implications.

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Foreign direct investments and environmental quality in sub-Saharan Africa: the merits of policy and institutions for environmental sustainability

Cited by 33 publications

References 60 publications

The impact of the Compact with Africa initiative on foreign direct investments and environmental pollution

The impact of the Compact with Africa initiative on foreign direct investments and environmental pollution

Do environmental regulations and technological innovation enhance environmental well‐being in sub‐Saharan Africa?

Business cycle synchronization and sustainable trade development in Africa: The role of capital mobility

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