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The Environment, Trade Openness, and Domestic and Foreign Investments

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  • Elmarzougui, Eskandar
  • Larue, Bruno
  • Tamini, Lota, D.

Abstract

This paper aims to study the impact of growth and trade openness on the environment at the regional level. We find support for the environmental Kuznet Curve hypothesis for CO2 emissions in Africa, Asia and OECD countries. We find that the pollution haven hypothesis is supported for CO2 in Africa, the Middle East and North Africa, the former United Socialist Soviet Republic and Eastern Europe, and South America, but not for Asia, for which the pollution halo hypothesis could not be rejected. The pollution haven hypothesis is also supported for SO2 emissions in South America while the pollution halo holds for SO2 emissions in Africa. We show that local investment is contributing significantly to both CO2 and SO2 emission increases in most regions while trade openness matters only in OECD and South America.

Suggested Citation

  • Elmarzougui, Eskandar & Larue, Bruno & Tamini, Lota, D., 2013. "The Environment, Trade Openness, and Domestic and Foreign Investments," MPRA Paper 61332, University Library of Munich, Germany, revised 2014.
  • Handle: RePEc:pra:mprapa:61332
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    More about this item

    Keywords

    CO2 and SO2 emissions; domestic investment; foreign direct investment; trade openness; ARDL;

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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