IDEAS home Printed from https://ideas.repec.org/a/ags/ajaees/357482.html

The Impact of Foreign Direct Investment towards Carbon Dioxide Level: Pollution Havens Model for ASEAN5 Countries

Author

Listed:
  • Ridzuan, Abdul Rahim
  • Noor, Abdul Halim Mohd
  • Ahmed, Elsadig Musa

Abstract

This paper aims to investigate the impact of foreign direct investment (FDI) on carbon dioxide (CO2) emissions through pollution-haven hypothesis model for original ASEAN5 (Malaysia, Singapore, Thailand, Indonesia, and Philippines) countries by using Autoregressive Distributed Lag (ARDL) approach also known as Bound test. Annual time series data is employed for the period spanning from 1970-2008 comprising 39 years of observation. The ARDL technique has the advantage of not requiring a specific identification of the order of the underlying data besides this technique is suitable for small or finite sample size. The results of ECM-ARDL for short run analysis are indicated that in the Philippines case, most of the coefficients in the short run are significant except for gross national income per capita (GNI). In the short run, GNI has showed positively relationship with the CO2 while the manufacturing value added (MV) has negative relationship with the CO2. Other countries in this study; Thailand and Indonesia show a mix evidence of relationship between their independent variables and the dependent variable. Moreover, the results of the long run elasticities show that for GNI, MV, and FDI have significantly and positively influenced the level of CO2 in Indonesia and Thailand. As compared to Philippines, only FDI inflow is positively influence the level of CO2 in this country. ASEAN5 countries should carefully monitor the level of CO2 in the nation as they received more FDI inflow in the countries.

Suggested Citation

  • Ridzuan, Abdul Rahim & Noor, Abdul Halim Mohd & Ahmed, Elsadig Musa, 2014. "The Impact of Foreign Direct Investment towards Carbon Dioxide Level: Pollution Havens Model for ASEAN5 Countries," Asian Journal of Agricultural Extension, Economics & Sociology, Asian Journal of Agricultural Extension, Economics & Sociology, vol. 3(5).
    • Handle: RePEc:ags:ajaees:357482
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/357482/files/Ridzuan352014AJAEES10411.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January.
    2. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, vol. 48(1), pages 71-81, January.
    3. Talukdar, Debabrata & Meisner, Craig M., 2001. "Does the Private Sector Help or Hurt the Environment? Evidence from Carbon Dioxide Pollution in Developing Countries," World Development, Elsevier, vol. 29(5), pages 827-840, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jiajia Zheng & Pengfei Sheng, 2017. "The Impact of Foreign Direct Investment (FDI) on the Environment: Market Perspectives and Evidence from China," Economies, MDPI, vol. 5(1), pages 1-15, March.
    2. Canfei He & Fenghua Pan & Yan Yan, 2012. "Is Economic Transition Harmful to China’s Urban Environment? Evidence from Industrial Air Pollution in Chinese Cities," Urban Studies, Urban Studies Journal Limited, vol. 49(8), pages 1767-1790, June.
    3. Shahbaz, Muhammad & Nasreen, Samia & Abbas, Faisal & Anis, Omri, 2015. "Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries?," Energy Economics, Elsevier, vol. 51(C), pages 275-287.
    4. Baek, Jungho, 2016. "A new look at the FDI–income–energy–environment nexus: Dynamic panel data analysis of ASEAN," Energy Policy, Elsevier, vol. 91(C), pages 22-27.
    5. Sabuj Kumar Mandal & Devleena Chakravarty, 2017. "Role of energy in estimating turning point of Environmental Kuznets Curve: an econometric analysis of the existing studies," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 19(2), pages 387-401, October.
    6. Supratik Guha, 2023. "Does Rising Energy Prices Lead to Production Fragmentation? An Example from Indian Manufacturing Industries," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 24(1), pages 78-100, March.
    7. Na Zhao & Ming Zhao & Han Long & Liang Yuan, 2025. "Facing or evading? The impact of environmental taxes on the migration of heavily polluting enterprises in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(5), pages 11773-11796, May.
    8. Takvor H. Mutafoglu, 2012. "Foreign Direct Investment, Pollution, and Economic Growth," Journal of Developing Societies, , vol. 28(3), pages 281-297, September.
    9. Boka Stéphane Kévin Assa, 2018. "Foreign direct investment, bad governance and forest resources degradation: evidence in Sub-Saharan Africa," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 107-125, April.
    10. Tang, Chor Foon & Abosedra, Salah & Naghavi, Navaz, 2021. "Does the quality of institutions and education strengthen the quality of the environment? Evidence from a global perspective," Energy, Elsevier, vol. 218(C).
    11. He, Jie, 2010. "What is the role of openness for China's aggregate industrial SO2 emission?: A structural analysis based on the Divisia decomposition method," Ecological Economics, Elsevier, vol. 69(4), pages 868-886, February.
    12. Tamazian, Artur & Chousa, Juan Piñeiro & Vadlamannati, Krishna Chaitanya, 2009. "Does higher economic and financial development lead to environmental degradation: Evidence from BRIC countries," Energy Policy, Elsevier, vol. 37(1), pages 246-253, January.
    13. Shu-Chen Chang, 2015. "Threshold effect of foreign direct investment on environmental degradation," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 14(1), pages 75-102, December.
    14. Sinha, Apra & Kumar, Abhishek & Gopalakrishnan, Badri Narayanan, 2020. "Environmental Kuznets Curve and Pollution Haven Hypothesis," MPRA Paper 98930, University Library of Munich, Germany.
    15. Ilker Akar, 2019. "The Pollution Haven Hypothesis and Foreign Trade - A Survey on the Relation with Environment," Economics Literature, WERI-World Economic Research Institute, vol. 1(1), pages 37-50, June.
    16. Chung Nguyen Hoang, 2021. "The Effects of Economic Integration on CO2 Emission: A View from Institutions in Emerging Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 374-383.
    17. Yunyi Hu & Haitao Yin & Jon J. Moon, 2022. "Environmental regulation and foreign investment: Evidence from China," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(4), pages 862-883, November.
    18. José M. Cansino & Rocio Román-Collado & Juan C. Molina, 2019. "Quality of Institutions, Technological Progress, and Pollution Havens in Latin America. An Analysis of the Environmental Kuznets Curve Hypothesis," Sustainability, MDPI, vol. 11(13), pages 1-20, July.
    19. Cave, Lisa A. & Blomquist, Glenn C., 2008. "Environmental policy in the European Union: Fostering the development of pollution havens?," Ecological Economics, Elsevier, vol. 65(2), pages 253-261, April.
    20. Wen Jun & Muhammad Zakaria & Syed Jawad Hussain Shahzad & Hamid Mahmood, 2018. "Effect of FDI on Pollution in China: New Insights Based on Wavelet Approach," Sustainability, MDPI, vol. 10(11), pages 1-20, October.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ajaees:357482. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://journalajaees.com/index.php/AJAEES/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.