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Environmental Accounting of Financial Development and Foreign Investment: Spatial Analyses of East Asia

Author

Listed:
  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam bin Abdulaziz University, 165, Al-Kharj 11942, Saudi Arabia)

  • Maham Furqan

    (S&P Global Marketing Intelligence, Islamabad 44000, Pakistan)

  • Omar Ali Bagais

    (Department of Accounting, College of Business Administration, Prince Sattam bin Abdulaziz University, 165, Al-Kharj 11942, Saudi Arabia)

Abstract

This paper aspires to examine the environmental effects of financial market development (FMD), foreign direct investment (FDI), and trade openness on the CO 2 emissions per capita along with the environmental Kuznets curve (EKC) hypothesis in six East Asian countries from 1991–2014. For this purpose, spatial econometrics is applied to consider the spillover effects from neighboring countries. The results of the study corroborate the spillover effects from neighboring countries’ CO 2 emissions per capita, FMD, FDI, and trade openness, and the EKC hypothesis is proven true in this region. Local FDI inflows, trade openness, and energy intensity are found to be responsible for local environmental degradation. Local FMD has an insignificant environmental effect, but neighboring countries’ FMD has contributed to the local CO 2 emissions per capita. Further, positive (negative) environmental spillover effects are found from neighboring countries’ FDI (trade openness).

Suggested Citation

  • Haider Mahmood & Maham Furqan & Omar Ali Bagais, 2018. "Environmental Accounting of Financial Development and Foreign Investment: Spatial Analyses of East Asia," Sustainability, MDPI, vol. 11(1), pages 1-16, December.
    • Handle: RePEc:gam:jsusta:v:11:y:2018:i:1:p:13-:d:191992
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    Cited by:

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    2. Mahmood, Haider, 2018. "An Investigation of Macroeconomic Determinants of FDI Inflows in Bangladesh," MPRA Paper 109448, University Library of Munich, Germany.
    3. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2019. "Energy Consumption and Trade Openness Nexus in Egypt: Asymmetry Analysis," Energies, MDPI, vol. 12(10), pages 1-10, May.
    4. Khadijah Iddrisu & Joshua Yindenaba Abor & Kannyiri T. Banyen, 2024. "Financial development, globalisation and foreign direct investment nexus: an empirical study from Africa," SN Business & Economics, Springer, vol. 4(6), pages 1-31, June.
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    6. Ronald Ebenezer Essel, 2023. "Foreign direct investment, technological spillover, and total factor productivity growth in Ghana," SN Business & Economics, Springer, vol. 3(8), pages 1-34, August.
    7. Mahmood, Haider & Chaudhary, A. R., 2013. "Impact of FDI on Income Inequality in Pakistan," MPRA Paper 109460, University Library of Munich, Germany.
    8. Shaio Yan Huang & An An Chiu & Po Chi Chao & Ni Wang, 2019. "The Application of Material Flow Cost Accounting in Waste Reduction," Sustainability, MDPI, vol. 11(5), pages 1-27, February.
    9. Kentaka Aruga, 2019. "Investigating the Energy-Environmental Kuznets Curve Hypothesis for the Asia-Pacific Region," Sustainability, MDPI, vol. 11(8), pages 1-12, April.
    10. Mollah Aminul Islam & Muhammad Asif Khan & József Popp & Wlodzimierz Sroka & Judit Oláh, 2020. "Financial Development and Foreign Direct Investment—The Moderating Role of Quality Institutions," Sustainability, MDPI, vol. 12(9), pages 1-22, April.
    11. Al-Qahtani, Maleeha Mohammed Zaaf & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider & Abdalla, Manal Abdalla Zahed & Mawad, Ghada Shihata Ebrahim & Alkhatib, Maha Ahmed Hussein, 2020. "Exploring the Level of Managerial, Political, Academic, Economic and Social Women Empowerment in Saudi Arabia," MPRA Paper 109447, University Library of Munich, Germany.
    12. Fuzhong Chen & Guohai Jiang & Kangyin Dong, 2022. "How do FDI inflows curvilinearly affect carbon emissions? Threshold effects of energy service availability and cleanliness," Australian Economic Papers, Wiley Blackwell, vol. 61(4), pages 798-824, December.

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