IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v14y2021i3p566-d485382.html
   My bibliography  Save this article

The Impact of Foreign Direct Investments and Economic Growth on Environmental Degradation: The Case of the Balkans

Author

Listed:
  • Aleksandra Pavlović

    (Faculty of Technical Sciences, University of Novi Sad, Novi Sad 21000, Serbia)

  • Milica Njegovan

    (Faculty of Technical Sciences, University of Novi Sad, Novi Sad 21000, Serbia)

  • Andrea Ivanišević

    (Faculty of Technical Sciences, University of Novi Sad, Novi Sad 21000, Serbia)

  • Mladen Radišić

    (Faculty of Technical Sciences, University of Novi Sad, Novi Sad 21000, Serbia)

  • Aleksandar Takači

    (Faculty of Technology, University of Novi Sad, Novi Sad 21000, Serbia)

  • Alpar Lošonc

    (Faculty of Technical Sciences, University of Novi Sad, Novi Sad 21000, Serbia)

  • Sebastian Kot

    (The Management Faculty, Czestochowa University of Technology, Armii Krajowej 19B, 42-201 Częstochowa, Poland
    Faculty of Economic and Management Sciences, North-West University, Vaal Triangle Campus, P.O. Box 1174, Vanderbijlpark 1900, South Africa)

Abstract

The aspiration of this study was to examine the impact of foreign direct investments (FDI) and economic growth on environmental degradation in the Balkans for the period 1998–2019. Balkan countries were classified into two groups, high income countries (HIC) and upper-middle income countries (UMIC). Thus, two hypotheses have been set. The effect of FDI on environmental degradation was observed through pollution haven hypothesis (PHH). To examine that connection, we used Pearson correlation for all countries, HIC and UMIC. Furthermore, the impact of economic growth on environmental degradation was tested through the environmental Kuznets curve (EKC) hypothesis. For that purpose, polynomial linear regression was applied. In order to examine the dependence of environmental degradation in relation to all predictors in the model, a multivariate linear regression was used. PHH was confirmed in Serbia, Albania, Croatia, Romania, and Bulgaria, the Balkans as a whole, and HIC, and the EKC hypothesis was rejected. This paper represents a contribution to a very scarce number of studies regarding the impact of FDI and economic growth on the environment in the Balkans, as a whole. The results of this study can be useful to policy makers in the terms of inducting stricter environmental rules.

Suggested Citation

  • Aleksandra Pavlović & Milica Njegovan & Andrea Ivanišević & Mladen Radišić & Aleksandar Takači & Alpar Lošonc & Sebastian Kot, 2021. "The Impact of Foreign Direct Investments and Economic Growth on Environmental Degradation: The Case of the Balkans," Energies, MDPI, vol. 14(3), pages 1-21, January.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:3:p:566-:d:485382
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/14/3/566/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/14/3/566/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Chang, Ching-Chih, 2010. "A multivariate causality test of carbon dioxide emissions, energy consumption and economic growth in China," Applied Energy, Elsevier, vol. 87(11), pages 3533-3537, November.
    2. Pao, Hsiao-Tien & Yu, Hsiao-Cheng & Yang, Yeou-Herng, 2011. "Modeling the CO2 emissions, energy use, and economic growth in Russia," Energy, Elsevier, vol. 36(8), pages 5094-5100.
    3. Hatzigeorgiou, Emmanouil & Polatidis, Heracles & Haralambopoulos, Dias, 2011. "CO2 emissions, GDP and energy intensity: A multivariate cointegration and causality analysis for Greece, 1977-2007," Applied Energy, Elsevier, vol. 88(4), pages 1377-1385, April.
    4. Padilla, Emilio & Serrano, Alfredo, 2006. "Inequality in CO2 emissions across countries and its relationship with income inequality: A distributive approach," Energy Policy, Elsevier, vol. 34(14), pages 1762-1772, September.
    5. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    6. Mladenović, Igor & Sokolov-Mladenović, Svetlana & Milovančević, Milos & Marković, Dušan & Simeunović, Nenad, 2016. "Management and estimation of thermal comfort, carbon dioxide emission and economic growth by support vector machine," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 466-476.
    7. Victor Owusu-Nantwi & Christopher Erickson, 2019. "Foreign direct investment and economic growth in South America," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(2), pages 383-398, March.
    8. Oleksandr Sabishchenko & Rafał Rębilas & Norbert Sczygiol & Mariusz Urbański, 2020. "Ukraine Energy Sector Management Using Hybrid Renewable Energy Systems," Energies, MDPI, vol. 13(7), pages 1-20, April.
    9. Erasmia Kotroni & Dimitra Kaika & Efthimios Zervas, 2020. "Environmental Kuznets Curve in Greece in the period 1960-2014," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 364-370.
    10. Neves, Sónia Almeida & Marques, António Cardoso & Patrício, Margarida, 2020. "Determinants of CO2 emissions in European Union countries: Does environmental regulation reduce environmental pollution?," Economic Analysis and Policy, Elsevier, vol. 68(C), pages 114-125.
    11. Zhang, Chuanguo & Zhou, Xiangxue, 2016. "Does foreign direct investment lead to lower CO2 emissions? Evidence from a regional analysis in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 943-951.
    12. Tiwari, Aviral Kumar & Shahbaz, Muhammad & Adnan Hye, Qazi Muhammad, 2013. "The environmental Kuznets curve and the role of coal consumption in India: Cointegration and causality analysis in an open economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 18(C), pages 519-527.
    13. Bilgili, Faik & Koçak, Emrah & Bulut, Ümit, 2016. "The dynamic impact of renewable energy consumption on CO2 emissions: A revisited Environmental Kuznets Curve approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 838-845.
    14. Henrik Hansen & John Rand, 2006. "On the Causal Links Between FDI and Growth in Developing Countries," The World Economy, Wiley Blackwell, vol. 29(1), pages 21-41, January.
    15. Jacky Mallett & Charles Keen, 2012. "Does GDP measure growth in the economy or simply growth in the money supply?," Papers 1208.0642, arXiv.org.
    16. Marques, António Cardoso & Caetano, Rafaela, 2020. "The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 107-118.
    17. 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.
    18. Shafiei, Sahar & Salim, Ruhul A., 2014. "Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: A comparative analysis," Energy Policy, Elsevier, vol. 66(C), pages 547-556.
    19. Seref Bozoklu & A. Oguz Demir & Sinan Ataer, 2020. "Reassessing the environmental Kuznets curve: a summability approach for emerging market economies," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(3), pages 513-531, September.
    20. Li Shen & Peter Koveos & Xiaodong Zhu & Fei Wen & Jiaxian Liao, 2020. "Outward FDI and Entrepreneurship: The Case of China," Sustainability, MDPI, vol. 12(13), pages 1-15, June.
    21. Kearsley, Aaron & Riddel, Mary, 2010. "A further inquiry into the Pollution Haven Hypothesis and the Environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 69(4), pages 905-919, February.
    22. Agras, Jean & Chapman, Duane, 1999. "A dynamic approach to the Environmental Kuznets Curve hypothesis," Ecological Economics, Elsevier, vol. 28(2), pages 267-277, February.
    23. Sharif, Arshian & Raza, Syed Ali & Ozturk, Ilhan & Afshan, Sahar, 2019. "The dynamic relationship of renewable and nonrenewable energy consumption with carbon emission: A global study with the application of heterogeneous panel estimations," Renewable Energy, Elsevier, vol. 133(C), pages 685-691.
    24. Gorus, Muhammed Sehid & Aydin, Mucahit, 2019. "The relationship between energy consumption, economic growth, and CO2 emission in MENA countries: Causality analysis in the frequency domain," Energy, Elsevier, vol. 168(C), pages 815-822.
    25. Hafezali Iqbal Hussain & Beata Slusarczyk & Fakarudin Kamarudin & Hassanudin Mohd Thas Thaker & Katarzyna Szczepańska-Woszczyna, 2020. "An Investigation of an Adaptive Neuro-Fuzzy Inference System to Predict the Relationship among Energy Intensity, Globalization, and Financial Development in Major ASEAN Economies," Energies, MDPI, vol. 13(4), pages 1-17, February.
    26. Joysri Acharyya, 2009. "Fdi, Growth And The Environment: Evidence From India On Co2 Emission During The Last Two Decades," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(1), pages 43-58, June.
    27. Salahuddin, Mohammad & Gow, Jeff, 2014. "Economic growth, energy consumption and CO2 emissions in Gulf Cooperation Council countries," Energy, Elsevier, vol. 73(C), pages 44-58.
    28. Seker, Fahri & Ertugrul, Hasan Murat & Cetin, Murat, 2015. "The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 347-356.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Yishuang & Liu, Wei & Zhang, Xiaoling & Dong, Hanmin & Zhao, Zhihui & Zhang, Zhan, 2024. "Domestic environmental impacts of OFDI: City-level evidence from China," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 391-409.
    2. Zhexuan Qin & Ilhan Ozturk, 2021. "Renewable and Non-Renewable Energy Consumption in BRICS: Assessing the Dynamic Linkage between Foreign Capital Inflows and Energy Consumption," Energies, MDPI, vol. 14(10), pages 1-17, May.
    3. Armenia Androniceanu & Oana Matilda Sabie, 2022. "Overview of Green Energy as a Real Strategic Option for Sustainable Development," Energies, MDPI, vol. 15(22), pages 1-35, November.

    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. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
    2. Muhammad Shahbaz & Avik Sinha, 2019. "Environmental Kuznets curve for CO2emissions: a literature survey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 106-168, January.
    3. Tiba, Sofien & Omri, Anis, 2017. "Literature survey on the relationships between energy, environment and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 1129-1146.
    4. Dogan, Eyup & Seker, Fahri, 2016. "The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1074-1085.
    5. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    6. Chen, Ping-Yu & Chen, Sheng-Tung & Hsu, Chia-Sheng & Chen, Chi-Chung, 2016. "Modeling the global relationships among economic growth, energy consumption and CO2 emissions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 420-431.
    7. Pata, Ugur Korkut, 2018. "The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey," Energy, Elsevier, vol. 160(C), pages 1115-1123.
    8. Rossanto Dwi Haryanto & Yessi Rahmawati & Omar Guillermo Rojas Altamirano & Salsabila Fahar Ahsani & Adrianus Kabubu Hudang & Tri Haryanto, 2022. "An Empirical Investigation between FDI, Tourism, and Trade on CO2 Emission in Asia: Testing Environmental Kuznet Curve and Pollution Haven Hypothesis," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 385-393, July.
    9. Opoku, Eric Evans Osei & Boachie, Micheal Kofi, 2020. "The environmental impact of industrialization and foreign direct investment," Energy Policy, Elsevier, vol. 137(C).
    10. Moataz Elshimy & Khadiga M. El-Aasar, 2020. "Carbon footprint, renewable energy, non-renewable energy, and livestock: testing the environmental Kuznets curve hypothesis for the Arab world," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6985-7012, October.
    11. Xiaoxia Shi & Haiyun Liu & Joshua Sunday Riti, 2019. "The role of energy mix and financial development in greenhouse gas (GHG) emissions’ reduction: evidence from ten leading CO2 emitting countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(3), pages 695-729, October.
    12. Seker, Fahri & Ertugrul, Hasan Murat & Cetin, Murat, 2015. "The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 347-356.
    13. Shahnazi, Rouhollah & Dehghan Shabani, Zahra, 2021. "The effects of renewable energy, spatial spillover of CO2 emissions and economic freedom on CO2 emissions in the EU," Renewable Energy, Elsevier, vol. 169(C), pages 293-307.
    14. Shahbaz, Muhammad & Hye, Qazi Muhammad Adnan & Tiwari, Aviral Kumar & Leitão, Nuno Carlos, 2013. "Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 109-121.
    15. Shahzad, Umer & Schneider, Nicolas & Ben Jebli, Mehdi, 2021. "How coal and geothermal energies interact with industrial development and carbon emissions? An autoregressive distributed lags approach to the Philippines," Resources Policy, Elsevier, vol. 74(C).
    16. Liu, Liyun & Zhao, Zhenzhi & Su, Bin & Ng, Tsan Sheng & Zhang, Mingming & Qi, Lin, 2021. "Structural breakpoints in the relationship between outward foreign direct investment and green innovation: An empirical study in China," Energy Economics, Elsevier, vol. 103(C).
    17. Demena, Binyam Afewerk & Afesorgbor, Sylvanus Kwaku, 2020. "The effect of FDI on environmental emissions: Evidence from a meta-analysis," Energy Policy, Elsevier, vol. 138(C).
    18. Shahbaz, Muhammad & Mahalik, Mantu Kumar & Shah, Syed Hasanat & Sato, João Ricardo, 2016. "Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: Statistical experience in next 11 countries," Energy Policy, Elsevier, vol. 98(C), pages 33-48.
    19. Tiba, Sofien & Belaid, Fateh, 2020. "The pollution concern in the era of globalization: Do the contribution of foreign direct investment and trade openness matter?," Energy Economics, Elsevier, vol. 92(C).
    20. Suyi Kim, 2020. "The Effects of Foreign Direct Investment, Economic Growth, Industrial Structure, Renewable and Nuclear Energy, and Urbanization on Korean Greenhouse Gas Emissions," Sustainability, MDPI, vol. 12(4), pages 1-14, February.

    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:jeners:v:14:y:2021:i:3:p:566-:d:485382. 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.