Are FDI Inflows Determinants of CO2 Emissions in the 20th and 21st Century?: Evidence from Four ECOWAS Nations

Abstract

To analyze the impact of CO2 emissions in the 20th and 21st centuries, this study employs four ECOWAS nations from 1980 to 2000 representing the 20th century, and 2001 to 2021 representing the 21st century. The main objective of the study is to test the validity of the pollution haven hypothesis and the pollution halo hypothesis on these countries in the 20th and 21st centuries. However, the second objective of this study is to assess how foreign direct investment and other variables influence CO2 emissions. After employing the generalized least square (GLS) and generalized method of moments (GMM), the research reveals a significant shift in the impact of FDI on environmental outcomes. In the 20th century, increased FDI inflows were positively associated with higher CO2 emissions, supporting the pollution haven hypothesis. In contrast, the pollution halo hypothesis found a negative correlation in the 21st century. The study also highlights the persistent positive impacts of GDP growth, population increases, and trade openness on CO2 emissions. According to this research’s findings, the authorities, policymakers, sectors, and interested parties of the countries studied should apply and uphold policies, laws, and regulations that deter polluting foreign investment while promoting environmentally friendly ones.

Presenters

David Dauda Lansana
Student, Master's Degree, Nanjing University of Information Science and Technology, China

Details

Presentation Type

Paper Presentation in a Themed Session

Theme

Economic, Social, and Cultural Context

KEYWORDS

Foreign Direct Investment, CO2 Emissions, ECOWAS, Pollution Haven Hypothesis, Pollution Halo Hypothesis