Does foreign direct investment asymmetrically affect the mitigation of environmental degradation in Malaysia?

Air pollutant emissions caused by receiving international industrial transfer in Southeast Asian developing countries from 1990 to 2018

Receiving international industrial transfer (mainly foreign direct investment, FDI) is extremely important for economic development but also brings negative environmental impacts for Southeast Asian developing countries (SEADCs). Due to relatively low labor costs and large market potential, SEADCs have become an attractive destination for industrial transfer after China, while studies were far from sufficient on the associated air pollutant emissions that would worsen air quality and threaten human health. We develop an exploratory framework to estimate the long-term trends of relevant air pollutant emissions in eight major SEADCs, including Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Thailand, and Vietnam. During 1990-2018, the emissions generally show a fluctuating upward trend and increased significantly in Cambodia, Laos, Philippines, and Vietnam. The total emissions of CO, NMVOC, SO2, NOX, PM2.5, and NH3 from the eight SEADCs increased from 19.0, 4.3, 3.6, 1.5, 0.5, and 0.4 kilotons (kt) to 391.6, 260.9, 271.1, 182.4, 48.4, and 12.2 kt, respectively. The emission growth in almost all SEADCs accelerated after 2008 and faster than FDI growth. The disparities in emissions among SEADCs basically grew first and then declined to a level lower than that of 1990, but generally exceeded the disparities in FDI. Productivity gain and emission intensity decrease primarily caused the emission growth and reduction, respectively. Relatively small reductions in emission intensity are found for NOX and SO2. In general, most SEADCs have utilized FDI for economic development without sufficient efforts on air pollutant emission controls. Our outcomes can inform the formulation and optimization of relevant policies reconciling economic development and air quality improvement in SEADCs.

Evaluating the influence of green growth, institutional quality and financial inclusion on financial stability: evidence by sustainable finance theory

Financial stability is essential for economic growth because it fosters confidence and trust and promotes investment in green development. However, it is a dilemma for the world economies to create an equilibrium between financial stability and environmental sustainability. In the extent of these challenges, the present study aims at grabbing the link of financial inclusion to attain financial stability. Further, the present study investigates the association of institutional quality, renewable energy, green growth, environmental sustainability, and financial inclusion with financial stability. Two basic econometric models are applied that focused on the basic and interaction term outcomes. In addition, principal component analysis (PCA) is analyzed to design an index for five proxies of financial inclusion. Additionally, the research inspected the interaction term of institutional quality and financial inclusion (FIN*INSQ) and determined the multiplied impact on financial stability in a separate model. This research employed the linear autoregressive distributed lag approach from 1990 to 2020 for long- and short-term dynamics. Theoretically, the research supports the sustainable finance and financial development theory. Hence, results showed that financial inclusion and institutional quality are positively associated with financial stability, while green growth, environmental sustainability, and renewable energy mechanisms are achieved through financial stability. Following our findings, the government should establish consistency between financial development and economic policies to maintain financial instability and ensure financial soundness. Furthermore, countries require viable financial institutions prioritizing green growth and institutional quality to achieve financial stability and long-term development.

The paradigms of transport energy consumption and technological innovation as a panacea for sustainable environment: is there any asymmetric association?

Technological innovations have a great potential to develop the transportation system as more efficient, intelligent, connected, and sustainable. Therefore, transport energy consumption fundamentally transmutes how goods and people are moved with significant effects on transport demand with related energy consumption on a sustainable environment. To this end, our research aimed at investigating the environmental performance (carbon dioxide and ecological footprint) by stochastic impact by regression through a population, affluence, and technology (STIRPAT) model, and econometric approach for estimation of transport energy consumption from 1975 to 2018 for Pakistan. Moreover, our study supports the literature by exploring the association of technological innovations, financial development, carbon damage costs, and economic growth with the environment. The linear relationships of the variables are governed by the autoregressive distributive lag (ARDL) model that interestingly explored that economic growth and energy consumption, and financial development degrade the environment and resource depletion; however, technological innovations are inclined towards cleaner technologies. For asymmetric findings, we employ the non-linear autoregressive distributive lag technique recently introduced by Shin et al. (2014). The findings validate the existence of an asymmetric relationship between transport energy consumption and environmental indicators. The policymakers' prerequisites the alternative energies apart from conventional energies in the transport sector with technological innovations in transport sector energy consumption like the electronic and hybrid vehicles for a cleaner environment.

Does foreign direct investment asymmetrically influence carbon emissions in sub-Saharan Africa? Evidence from nonlinear panel ARDL approach

In recent decades, the relationship between foreign direct investment (FDI) and carbon emissions has garnered the extensive attention by researchers and governments across the globe. Also, for most part, empirical studies on this nexus have assumed a symmetric relationship through the imposition of linear specifications. However, such relationships do not account for asymmetries in the impact of FDI on carbon emissions. In the case of sub-Saharan Africa, such relationships are crucial and need more careful analysis given the important role FDI plays in the development of the sub-region. Thus, this paper examines the asymmetric effect of FDI on carbon emissions in 41 selected sub-Saharan African countries spanning from 1996 to 2018. In order to decompose FDI into positive and negative partial sum and examine possible asymmetric effects of the variables on carbon emissions, we used the panel nonlinear autoregressive distributed lag (NARDL) approach. This method accounts for cross-sectional variances. Our results show that in the long run, a positive shock in FDI increases carbon emissions while a negative shock lowers them. Our results also show that carbon emissions respond asymmetrically to changes in FDI. It is recommended that comprehensive investment policies aimed at encouraging clean technology and environmentally friendly investments be implemented to ensure environmental sustainability.

Do foreign direct investments influence environmental degradation? Evidence from a panel autoregressive distributed lag model approach to low-, lower-middle-, upper-middle-, and high-income countries

The main aim of the present study is to examine the possible nonlinear relations between foreign direct investments and environmental deterioration for subpanels separated according to the income levels of countries by using the classification made by the World Bank. Total energy consumption, economic growth, and renewable energy share are also considered as determinants of environmental deterioration in the model. Cross-sectional dependence is observed; hence, appropriate panel data unit root and cointegration tests are utilized for which results pointed out mixed integration order. Pooled mean group (PMG) estimator panel auto-regressive distributed lag (ARDL, hereafter) approach is adapted to observe short- and long-run relationships between the variables. Long-run results supported the pollution haven hypothesis as foreign direct investments caused an increase in ecological footprint. Findings are sensitive to different income levels of the subpanels of countries. This empirical study suggests tailored policymaking for every income level subpanel to ensure sustainable development.