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

Author

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  • 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
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