The Relationship Between FDI, Poverty Reduction and Environmental Sustainability in Tunisia

Abstract

Our goal in this paper is the study of the impact of FDI on poverty and sustainable development in the case of Tunisia and during the study period from 1985 to 2015. In addition, we use the test unit root of cointegration test, the model error correction of FMOLS and Granger causality. In the case of Tunisia, we find that all variables are integrated of order 1. Thus, we can use the cointegration test. Indeed, the result of the null hypothesis test of no cointegration was rejected at the 5% threshold, which explains the presence of a cointegration relationship between FDI, sustainable development and poverty. Finally, we present and interpreted the results of the estimated FMOLS model and Granger causality test to study the contribution of FDI to the poverty reduction and sustainable development in Tunisia. We find that the LIDE variable measuring foreign direct investment has a significant negative impact on the GINI index. We notice the LCO2 variable that measures the CO2 emissions has a negative and significant impact on poverty as measured by the poverty gap at $ 1.91. We prove that direct foreign investments have a significant negative impact on CO2 emissions. We find that the LIDE variable measuring foreign direct investment has a significant negative impact on the GINI index. We notice the LCO2 variable that measures the CO2 emissions has a negative and significant impact on poverty as measured by the poverty gap at $ 1.91. We prove that direct foreign investments have a significant negative impact on CO2 emissions. We found that the LIDE variable measuring foreign direct investment has a significant negative impact on the GINI index. We notice the LCO2 variable that measures the CO2 emissions has a negative and significant impact on poverty as measured by the poverty gap at $ 1.91. We prove that direct foreign investments have a significant negative impact on CO2 emissions.

Effect of Foreign Direct Investment and Trade Openness on the Poverty Alleviation in Burundi – Sub African Country: ARDL (Co-integration) Approach

“…On the contrary, FDI inflow helped in poverty reduction in Nepal and Sri Lanka while increasing poverty in Pakistan and Bangladesh (Chindengwike, 2022a;Mahmood & Chaudhary, 2012). Lazreg and Zouari (2018) have also proved through unit root test of co-integration, the model error correction of FMOLS and Granger causality that FDI and poverty have negative correlation to each other in Pakistan. (Chindengwike, 2022a) disclosed that FDI was in a positive relation to the poverty alleviation among the developing and underdeveloped countries using time series data analysis from 1987-2017 for Tanzania.…”

Assessing the impacts of formal and informal regulations on ecological footprint

“…Cordier et al (2021) use the adult literacy rate to examine the environmental EKC hypothesis. Lazreg and Zouari (2018) employ the youth literacy rate as a variable of youth power to explore the nexus between FDI and environmental sustainability. Following Wang and Shao (2019), we allow for the constraint of the obtained database and the share of patents in environmental‐related technologies (OECD, 2021).…”

Impact of Foreign Direct Investment on Welfare in Africa: Empirical Evidence from Guinea

“…[17] states that "FDI has been considered as a powerful engine and a significant catalyst for attaining development, poverty reduction and global integration process. Similarly, [18] assert that FDI in social services such as water and energy is the most credible strategy to fight against poverty in developing nations. [19] assessed what impacts foreign capital may have on income inequality in 54 countries over the period 1980-2005 and found that FDI negatively affects the income of nations with limited absorptive capacity rather than those with strong absorptive capacity.…”