1,869
Views
7
CrossRef citations to date
0
Altmetric
GENERAL & APPLIED ECONOMICS

The asymmetric relationship between foreign direct investment, oil prices and carbon emissions: evidence from Gulf Cooperative Council economies

ORCID Icon, ORCID Icon & ORCID Icon
Article: 2080316 | Received 27 Feb 2022, Accepted 09 May 2022, Published online: 29 May 2022

References

  • Acharyya, J. (2009). FDI, growth and the environment: Evidence from India on CO2 emission during the last two decades. Journal of Economic Development, 34(1), 43. https://doi.org/10.35866/caujed.2009.34.1.003
  • Agbanike, T. F., Nwani, C., Uwazie, U. I., Anochiwa, L. I., Onoja, T. G. C., & Ogbonnaya, I. O. (2019). Oil price, energy consumption and carbon dioxide (CO 2) emissions: Insight into sustainability challenges in Venezuela. Latin American Economic Review, 28(1), 1–20. https://doi.org/10.1186/s40503-019-0070-8
  • Alshehry, A. S., & Belloumi, M. (2015). Energy consumption, carbon dioxide emissions and economic growth: The case of Saudi Arabia. Renewable and Sustainable Energy Reviews, 41, 237–247. https://doi.org/10.1016/j.rser.2014.08.004
  • Backus, D. K., & Crucini, M. J. (2000). Oil prices and the terms of trade. Journal of International Economics, 50(1), 185–213. https://doi.org/10.1016/S0022-1996(98)00064-6
  • Baek, J. (2016). A new look at the FDI–income–energy–environment nexus: Dynamic panel data analysis of ASEAN. Energy Policy, 91, 22–27. https://doi.org/10.1016/j.enpol.2015.12.045
  • Behera, S. R., & Dash, D. P. (2017). The effect of urbanization, energy consumption, and foreign direct investment on the carbon dioxide emission in the SSEA (South and Southeast Asian) region. Renewable and Sustainable Energy Reviews, 70, 96–106. https://doi.org/10.1016/j.rser.2016.11.201
  • Breitung, J. (2000) The Local Power of Some Unit Root Tests for Panel Data. Advances in Econometrics, 15, 161–177. http://dx.doi.org/10.1016/S0731-9053(00)15006-6
  • Breitung, J. (2001). Rank tests for nonlinear cointegration. Journal of Business and Economic Statistics, 19(3), 331–340. https://doi.org/10.1198/073500101681019981
  • Chandran, V. G. R., & Tang, C. F. (2013). The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies. Renewable and Sustainable Energy Reviews, 24, 445–453. https://doi.org/10.1016/j.rser.2013.03.054
  • Dinda, S. (2004). Environmental Kuznets Curve Hypothesis: A Survey. Ecological Economics, 49(4), 431–455. https://doi.org/10.1016/j.ecolecon.2004.02.011
  • Eskeland, G. S., & Harrison, A. E. (2003). Moving to greener pastures? Multinationals and the pollution haven hypothesis. Journal of Development Economics, 70(1), 1–23. https://doi.org/10.1016/S0304-3878(02)00084-6
  • Fuinhas, J. A., & Marques, A. C. (2013). Rentierism, energy and economic growth: The case of Algeria and Egypt (1965–2010). Energy Policy, 62, 1165–1171. https://doi.org/10.1016/j.enpol.2013.07.082
  • Gokmenoglu, K., Azin, V., & Taspinar, N. (2015). The relationship between industrial production, GDP, inflation and oil price: The case of Turkey. Procedia Economics and Finance, 25, 497–503. https://doi.org/10.1016/S2212-5671(15)00762-5
  • Goldenman, G. (1999). The environmental implications of foreign direct investment: Policy and institutional issues. Foreign Direct Investment and the Environment, 1, 75–91.
  • Hadri, K. (2000). Testing for stationarity in heterogeneous panel data. The Econometrics Journal, 3(2), 148–161. https://doi.org/10.1111/1368-423X.00043
  • Hamid, I., Jena, P. K., & Mukhopdhyay, D. (2020). Should China prefer more foreign direct investment inflows to environmental change? Journal of Public Affairs, 22(2), 1–18. https://doi.org/10.1002/pa.2466
  • Hamid, I., Shabbir, A., Murshed, M., Jena, P. K., Sha, N., & Alam, M. N. (2021 1-17). The roles of foreign direct investments, economic growth, and capital investments in decarbonizing the economy of Oman. Environmental Science and Pollution Research, 29(15), 22122–22138. https://doi.org/10.1007/s11356-021-17246-3
  • Hamilton, J. D. (2003). What is an oil shock? Journal of Econometrics, 113(2), 363–398. https://doi.org/10.1016/S0304-4076(02)00207-5
  • Hammoudeh, S., Nguyen, D. K., & Sousa, R. M. (2014). Energy prices and CO2 emission allowance prices: A quantile regression approach. Energy Policy, 70, 201–206. https://doi.org/10.1016/j.enpol.2014.03.026
  • Hanif, I., Raza, S. M. F., Gago-de-Santos, P., & Abbas, Q. (2019). Fossil fuels, foreign direct investment, and economic growth have triggered CO2 emissions in emerging Asian economies: Some empirical evidence. Energy, 171, 493–501. https://doi.org/10.1016/j.energy.2019.01.011
  • Harris, R., Tzavalis, D., & E. (1999). Inference for unit roots in dynamic panels where the time dimension is fixed. Journal of Econometrics, 91(2), 201–226. https://doi.org/10.1016/S0304-4076(98)00076-1
  • Howarth, N., Galeotti, M., Lanza, A., & Dubey, K. (2017). Economic development and energy consumption in the GCC: An international sectoral analysis. Energy Transitions, 1(2), 1–19. https://doi.org/10.1007/s41825-017-0006-3
  • Huang, Y., Chen, X., Zhu, H., Huang, C., & Tian, Z. (2019). The heterogeneous effects of FDI and foreign trade on CO2 emissions: Evidence from China. Mathematical Problems in Engineering, 2019, 1–14 .
  • Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53–74. https://doi.org/10.1016/S0304-4076(03)00092-7
  • Jewell, J., McCollum, D., Emmerling, J., Bertram, C., Gernaat, D. E., Krey, V., Riahi, K., Berger, L., Fragkiadakis, K., Keppo, I., Saadi, N., Tavoni, M., van Vuuren, D., Vinichenko, V., & Riahi, K. (2018). Limited emission reductions from fuel subsidy removal except in energy-exporting regions. Nature, 554(7691), 229–233. https://doi.org/10.1038/nature25467
  • Jijian, Z., Twum, A., Agyemang, A., Kofi, E., & Ayamba, E. (2021). Empirical study on the impact of international trade and foreign direct investment on carbon emission for belt and road countries. Energy Reports, 7, 7591–7600. https://doi.org/10.1016/j.egyr.2021.09.122
  • Jones, G. A., & Warner, K. J. (2016). The 21st century population-energy-climate nexus. Energy Policy, 93, 206–212. https://doi.org/10.1016/j.enpol.2016.02.044
  • Katircioglu, S. (2017). Investigating the role of oil prices in the conventional EKC model: Evidence from Turkey. Asian Economic and Financial Review, 7(5), 498–508. https://doi.org/10.18488/journal.aefr/2017.7.5/102.5.498.508
  • Kebede, E., Kagochi, J., & Jolly, C. M. (2010). Energy consumption and economic development in Sub-Saharan Africa. Energy Economics, 32(3), 532–537. https://doi.org/10.1016/j.eneco.2010.02.003
  • Kheder, S. B., & Zugravu, N. (2012). Environmental regulation and French firms location abroad: An economic geography model in an international comparative study. Ecological Economics, 77, 48–61. https://doi.org/10.1016/j.ecolecon.2011.10.005
  • Kim, S. (2019). CO2 emissions, foreign direct investments, energy consumption, and GDP in developing countries: A more comprehensive study using panel vector error correction model. Korean Economic Review, 35(1), 5–24. http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20190101-35-1-01.pdf.
  • Kivyiro, P., & Arminen, H. (2014). Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: Causality analysis for Sub-Saharan Africa. Energy, 74, 595–606. https://doi.org/10.1016/j.energy.2014.07.025
  • Kongkuah, M., Yao, H., Fonjong, B., & Agyemang, A. (2021). The role of CO2 emissions and economic growth in energy consumption: Empirical evidence from Belt and Road and OECD countries. Environmental Science and Pollution Research, 28, https://doi.org/10.1007/s11356-020-11982-8.
  • Lau, L. S., Choong, C. K., & Eng, Y. K. (2014). Investigation of the environmental Kuznets curve for carbon emissions in Malaysia: Do foreign direct investment and trade matter? Energy Policy, 68, 490–497. https://doi.org/10.1016/j.enpol.2014.01.002
  • Lescaroux, F., & Mignon, V. (2008). On the influence of oil prices on economic activity and other macroeconomic and financial variables. OPEC Energy Review, 32(4), 343–380. https://doi.org/10.1111/j.1753-0237.2009.00157.x
  • Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1–24. https://doi.org/10.1016/S0304-4076(01)00098-7
  • Li, X., Zhou, Y., Yu, S., Jia, G., Li, H., & Li, W. (2019). Urban heat island impacts on building energy consumption: A review of approaches and findings. Energy, 174, 407–419. https://doi.org/10.1016/j.energy.2019.02.183
  • Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S1), 631–652. https://doi.org/10.1111/1468-0084.0610s1631
  • Malik, M. Y., Latif, K., Khan, Z., Butt, H. D., Hussain, M., & Nadeem, M. A. (2020). Symmetric and asymmetric impact of oil price, FDI and economic growth on carbon emission in Pakistan: Evidence from ARDL and non-linear ARDL approach. Science of the Total Environment, 726, 138421. https://doi.org/10.1016/j.scitotenv.2020.138421
  • Mehrara, M., & Oskoui, K. N. (2007). The sources of macroeconomic fluctuations in oil exporting countries: A comparative study. Economic Modelling, 24(3), 365–379. https://doi.org/10.1016/j.econmod.2006.08.005
  • Mensah, I. A., Sun, M., Gao, C., Omari-Sasu, A. Y., Zhu, D., Ampimah, B. C., & Quarcoo, A. (2019). Analysis on the nexus of economic growth, fossil fuel energy consumption, CO2 emissions and oil price in Africa based on a PMG panel ARDL approach. Journal of Cleaner Production, 228, 161–174. https://doi.org/10.1016/j.jclepro.2019.04.281
  • Merican, Y., Yusop, Z., Noor, Z. M., & Hook, L. S. (2007). Foreign direct investment and the pollution in five ASEAN nations. International Journal of Economics and Management, 1(2), 245–261.
  • Millimet, D. L., & Roy, J. (2015). Multilateral environmental agreements and the WTO. Economics Letters, 134, 20–23. https://doi.org/10.1016/j.econlet.2015.05.035
  • Mujtaba, A., Jena, P. K., & Mukhopdhyay, D. (2020). Determinants of CO2 emissions in upper middle-income group countries: An empirical investigation. Environmental Science and Pollution Research, 27(30), 37745–37759. https://doi.org/10.1007/s11356-020-09803-z
  • Mujtaba, A., & Jena, P. K. (2021). Analyzing asymmetric impact of economic growth, energy use, FDI inflows and oil prices on CO2 emissions through NARDL approach. Environmental Science and Pollution Research, 28(24), 30873–30886. https://doi.org/10.1007/s11356-021-12660-z
  • Mujtaba, A., Jena, P. K., & Joshi, D. P. P. (2021). Growth and determinants of CO2 emissions: Evidence from selected Asian emerging economies. Environmental Science and Pollution Research, 28(29), 39357–39369. https://doi.org/10.1007/s11356-021-13078-3
  • Mujtaba, A., Jena, P. K., Bekun, F. V., & Sahoo, P. (2022). Symmetric and asymmetric impact of economic growth, capital formation, renewable and non renewable energy consumption on environment in OECD Countries. Renewable and Sustainable Energy Reviews, 160(112300), 1–13. https://doi.org/10.1016/j.rser.2022.112300
  • Naz, S., Sultan, R., Zaman, K., Aldakhil, A. M., Nassani, A. A., & Abro, M. M. Q. (2019). Moderating and mediating role of renewable energy consumption, FDI inflows, and economic growth on carbon dioxide emissions: Evidence from robust least square estimator. Environmental Science and Pollution Research, 26(3), 2806–2819. https://doi.org/10.1007/s11356-018-3837-6
  • Nwani, C. (2017). Causal relationship between crude oil price, energy consumption and carbon dioxide (CO2) emissions in Ecuador. OPEC Energy Review, 41(3), 201–225. https://doi.org/10.1111/opec.12102
  • Ohler, A. M., & Billger, S. M. (2014). Does environmental concern change the tragedy of the commons? Factors affecting energy saving behaviors and electricity usage. Ecological Economics, 107, 1–12. https://doi.org/10.1016/j.ecolecon.2014.07.031
  • Ostic, D., Twum, A. K., & Agyemang, A. O. (2021). Assessing the impact of oil and gas trading, foreign direct investment inflows, and economic growth on carbon emission for OPEC member countries. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-021-18156-0
  • Oyedepo, S. O. (2014). Towards achieving energy for sustainable development in Nigeria. Renewable and Sustainable Energy Reviews, 34, 255–272. https://doi.org/10.1016/j.rser.2014.03.019
  • Ozturk, I., & Acaravci, A. (2010). CO2 emissions, energy consumption and economic growth in Turkey. Renewable and Sustainable Energy Reviews, 14(9), 3220–3225. https://doi.org/10.1016/j.rser.2010.07.005
  • Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79–113. https://doi.org/10.1016/0304-4076(94)01644-F
  • Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621–634. https://doi.org/10.1080/01621459.1999.10474156
  • Ren, S., Yuan, B., Ma, X., & Chen, X. (2014). International trade, FDI (foreign direct investment) and embodied CO2 emissions: A case study of China's industrial sectors. China Economic Review, 28, 123–134. https://doi.org/10.1016/j.chieco.2014.01.003
  • Saboori, B., Sulaiman, J., & Mohd, S. (2016). Environmental Kuznets curve and energy consumption in Malaysia: A cointegration approach. Energy Sources, Part B: Economics, Planning, and Policy, 11(9), 861–867. https://doi.org/10.1080/15567249.2012.662264
  • Sadorsky, P. (2009). Renewable energy consumption and income in emerging economies. Energy Policy, 37(10), 4021–4028. https://doi.org/10.1016/j.enpol.2009.05.003
  • Shahbaz, M., Loganathan, N., Zeshan, M., & Zaman, K. (2015). Does renewable energy consumption add in economic growth? An application of auto-regressive distributed lag model in Pakistan. Renewable and Sustainable Energy Reviews, 44, 576–585. https://doi.org/10.1016/j.rser.2015.01.017
  • Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2014). Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In Festschrift in honour of Peter Schmidt (pp. 281–314). Springer. ISBN : 978-1-4899-8007-6.
  • Tang, J. (2015). Testing the pollution haven effect: Does the type of FDI matter? Environmental and Resource Economics, 60(4), 549–578. https://doi.org/10.1007/s10640-014-9779-7
  • Tirgil, A., Acar, Y., & Özgür, Ö. (2021). Revisiting the environmental Kuznets curve: Evidence from Turkey. Environment, Development and Sustainability, 23, 1–20. https://doi.org/10.1007/s10668-021-01259-6
  • Troster, V., Shahbaz, M., & Uddin, G. S. (2018). Renewable energy, oil prices, and economic activity: A Granger-causality in quantiles analysis. Energy Economics, 70, 440–452. https://doi.org/10.1016/j.eneco.2018.01.029
  • Umar, Z., Gubareva, M., Tran, D. K., & Teplova, T. (2021). Impact of the Covid-19 induced panic on the Environmental, Social and Governance leaders equity volatility: A time-frequency analysis. Research in International Business and Finance, 58. https://doi.org/10.1016/j.ribaf.2021.101493
  • Umar, Z., Trabelsi, N., & Zaremba, A. (2021a). Oil shocks and equity markets: The case of GCC and BRICS economies. Energy Economics, 96, 105155. https://doi.org/10.1016/j.eneco.2021.105155
  • Umar, Z., Aharon, D. Y., Esparcia, C., & AlWahedi, W. (2022). Spillovers between sovereign yield curve components and oil price shocks. Energy Economics, 109, 105963. https://doi.org/10.1016/j.eneco.2022.105963
  • US Energy Information Agency. (2018). US crude oil and natural gas proved reserves (EIA). Year-end 2016.
  • Wong, S. L., Chia, W. M., & Chang, Y. (2013). Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth. Energy Policy, 62, 1581–1590. https://doi.org/10.1016/j.enpol.2013.07.025
  • Zarsky, L. (1999). Havens, halos and spaghetti: Untangling the evidence about foreign direct investment and the environment. Foreign Direct Investment and the Environment, 13(8), 47–74.
  • Zeng, K., & Eastin, J. (2012). Do developing countries invest up? The environmental effects of foreign direct investment from less-developed countries. World Development, 40(11), 2221–2233. https://doi.org/10.1016/j.worlddev.2012.03.008
  • Zhang, Y., & Zhang, S. (2018). The impacts of GDP, trade structure, exchange rate and FDI inflows on China’s carbon emissions. Energy Policy, 120, 347–353. https://doi.org/10.1016/j.enpol.2018.05.056