IDEAS home Printed from https://ideas.repec.org/a/gam/jecomi/v13y2025i9p258-d1742777.html
   My bibliography  Save this article

Shadow Economy and the Ecological Footprint Nexus: The Implication of Foreign Direct Investment in ASEAN Countries

Author

Listed:
  • Nattapan Kongbuamai

    (Tourism, Hospitality and Event Research Group (TH&E), School of Management, Mae Fah Luang University, Chiang Rai 57100, Thailand
    Office of Border Economy and Logistics Study (OBELS), School of Management, Mae Fah Luang University, Chiang Rai 57100, Thailand)

  • Quocviet Bui

    (Faculty of Commerce, Ho Chi Minh City University of Industry and Trade, Ho Chi Minh City 700000, Vietnam)

  • Suthep Nimsai

    (College of Management, Mahidol University, Bangkok 10400, Thailand)

Abstract

This study examines the influence of economic growth, energy consumption, a shadow economy, and foreign direct investment (FDI) on the ecological footprint in ASEAN countries. The analysis covers a panel of nine member states—Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—over the period from 1993 to 2017 due to data availability. To ensure robustness, various panel econometric techniques were employed, including cross-sectional dependence, panel unit root, and cointegration tests, as well as estimation methods such as Driscoll–Kraay standard errors, feasible generalized least squares (FGLS), and panel-corrected standard errors (PCSE). The results do not support an inverted U-shaped Environmental Kuznets Curve (EKC) between economic growth and ecological footprint in the ASEAN countries. Moreover, the findings consistently show that energy consumption, the size of the shadow economy, and FDI exert a statistically significant and positive impact on the ecological footprint towards the Driscoll–Kraay standard errors, FGLSs, and PCSE estimators. For policy recommendations, a country’s pursuit of economic growth should be aligned with a higher degree of environmental sustainability by strategically reducing energy consumption, curbing the shadow economy, and managing foreign direct investment responsibly.

Suggested Citation

  • Nattapan Kongbuamai & Quocviet Bui & Suthep Nimsai, 2025. "Shadow Economy and the Ecological Footprint Nexus: The Implication of Foreign Direct Investment in ASEAN Countries," Economies, MDPI, vol. 13(9), pages 1-18, September.
    • Handle: RePEc:gam:jecomi:v:13:y:2025:i:9:p:258-:d:1742777
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7099/13/9/258/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7099/13/9/258/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hongbo Liu & Hanho Kim, 2018. "Ecological Footprint, Foreign Direct Investment, and Gross Domestic Production: Evidence of Belt & Road Initiative Countries," Sustainability, MDPI, vol. 10(10), pages 1-28, September.
    2. Jean Huge & Tom Waas & Aviel Verbruggen & Tarah Wright, 2011. "Sustainable development: a bird's eye view," ULB Institutional Repository 2013/217964, ULB -- Universite Libre de Bruxelles.
    3. Nguyen Phuc Canh & Su Dinh Thanh & Christophe Schinckus & Jo Bensemann & Lai Trung Thanh, 2019. "Global Emissions: A New Contribution from the Shadow Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 320-337.
    4. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Khan, Naveed R. & Mirza, Faisal Mehmood & Hou, Fujun & Kirmani, Syed Ali Ashiq, 2019. "The impact of natural resources, human capital, and foreign direct investment on the ecological footprint: The case of the United States," Resources Policy, Elsevier, vol. 63(C), pages 1-1.
    5. Tom Waas & Jean Hugé & Aviel Verbruggen & Tarah Wright, 2011. "Sustainable Development: A Bird’s Eye View," Sustainability, MDPI, vol. 3(10), pages 1-25, September.
    6. Wang, Zhaohua & Bui, Quocviet & Zhang, Bin, 2020. "The relationship between biomass energy consumption and human development: Empirical evidence from BRICS countries," Energy, Elsevier, vol. 194(C).
    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. Muntasir Murshed & Mohamed Elheddad & Rizwan Ahmed & Mohga Bassim & Ei Thuzar Than, 2022. "Foreign Direct Investments, Renewable Electricity Output, and Ecological Footprints: Do Financial Globalization Facilitate Renewable Energy Transition and Environmental Welfare in Bangladesh?," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(1), pages 33-78, March.
    2. Qaisar Shahzad & Kentaka Aruga, 2023. "Does the Environmental Kuznets Curve Hold for Coal Consumption? Evidence from South and East Asian Countries," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    3. Judith Janker, 2020. "Moral conflicts, premises and the social dimension of agricultural sustainability," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(1), pages 97-111, March.
    4. Rosalind Sharpe & David Barling, 2019. "‘The right thing to do’: ethical motives in the interpretation of social sustainability in the UK’s conventional food supply," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 36(2), pages 329-340, June.
    5. Junaid Ashraf & Aiman Javed & Muhammad Asif Khan, 2025. "An analysis of the environmental consequences of natural resources and economic openness: the moderation role of institutional quality," Economic Change and Restructuring, Springer, vol. 58(3), pages 1-24, June.
    6. Szopik-Depczyńska, Katarzyna & Cheba, Katarzyna & Bąk, Iwona & Kiba-Janiak, Maja & Saniuk, Sebastian & Dembińska, Izabela & Ioppolo, Giuseppe, 2017. "The application of relative taxonomy to the study of disproportions in the area of sustainable development of the European Union," Land Use Policy, Elsevier, vol. 68(C), pages 481-491.
    7. Lian Xue & Mohammad Haseeb & Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Muntasir Murshed, 2021. "Renewable Energy Use and Ecological Footprints Mitigation: Evidence from Selected South Asian Economies," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    8. Wang, Zhe & Chen, Huangxin & Teng, Yin-Pei, 2023. "Role of greener energies, high tech-industries and financial expansion for ecological footprints: Implications from sustainable development perspective," Renewable Energy, Elsevier, vol. 202(C), pages 1424-1435.
    9. Laura Del-Río-Carazo & Santiago Iglesias-Pradas & Emiliano Acquila-Natale & José Gabriel Martín-Fernández, 2021. "Appropriate Technology for Access to Universal Basic Services: A Case Study on Basic Electricity Service Provision to Remote Communities in the Napo River Basin," Sustainability, MDPI, vol. 14(1), pages 1-15, December.
    10. Thomas Allen & Paolo Prosperi & Bruce Cogill & Martine Padilla & Iuri Peri, 2019. "A Delphi Approach to Develop Sustainable Food System Metrics," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(3), pages 1307-1339, February.
    11. E. M. Nkoana & T. Waas & A. Verbruggen & C. J. Burman & J. Hugé, 2017. "Analytic framework for assessing participation processes and outcomes of climate change adaptation tools," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(5), pages 1731-1760, October.
    12. Saud, Shah & Haseeb, Abdul & Zafar, Muhammad Wasif & Li, Huiyun, 2023. "Articulating natural resource abundance, economic complexity, education and environmental sustainability in MENA countries: Evidence from advanced panel estimation," Resources Policy, Elsevier, vol. 80(C).
    13. Ayesha Ashraf & Nadia Doytch, 2023. "Does investing abroad reduce the ecological footprints at home? Analysis of outward GFDI and M&A from developed and developing countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6689-6710, July.
    14. PANȚA Nancy Diana, 2019. "Clashing Perspectives On Sustainable Development," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 14(1), pages 181-190, April.
    15. Koç, Pınar & Gülmez, Ahmet, 2021. "Analysis of relationships between nanotechnology applications, mineral saving and ecological footprint: Evidence from panel fourier cointegration and causality tests," Resources Policy, Elsevier, vol. 74(C).
    16. Vishal Dagar & Farhan Ahmed & Farah Waheed & Štefan Bojnec & Muhammad Kamran Khan & Sana Shaikh, 2022. "Testing the Pollution Haven Hypothesis with the Role of Foreign Direct Investments and Total Energy Consumption," Energies, MDPI, vol. 15(11), pages 1-23, May.
    17. Fortune Ganda, 2022. "The Environmental Impacts of Human Capital in the BRICS Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 611-634, March.
    18. Magdalene Williams & Ahmad Abu Alrub & Mehmet Aga, 2022. "Ecological Footprint, Economic Uncertainty and Foreign Direct Investment in South Africa: Evidence From Asymmetric Cointegration and Dynamic Multipliers in a Nonlinear ARDL Approach," SAGE Open, , vol. 12(2), pages 21582440221, April.
    19. Rafei, Meysam & Esmaeili, Parisa & Balsalobre-Lorente, Daniel, 2022. "A step towards environmental mitigation: How do economic complexity and natural resources matter? Focusing on different institutional quality level countries," Resources Policy, Elsevier, vol. 78(C).
    20. Nisamudheen, P.P. & Shareef, K. Hassan, 2025. "The role of human capital in driving renewable energy and sustainable development in India," Utilities Policy, Elsevier, vol. 95(C).

    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:gam:jecomi:v:13:y:2025:i:9:p:258-:d:1742777. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.