Do human capital and governance thresholds matter for the environmental impact of FDI? The evidence from MENA countries

This paper studies whether foreign direct investment (FDI)-CO 2 emissions relationship may change depending on the data-driven estimated threshold levels for the country characteristics (CC) including human capital and governance in a sample of 13 Middle East and North Africa (MENA) economies during...

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Bibliographic Details
Published in:Environmental science and pollution research international 2023-03, Vol.30 (14), p.41741-41754
Main Authors: Taşdemir, Fatma, Özçelik, Seda Ekmen
Format: Article
Language:English
Subjects:
Africa, Northern
Alternative energy sources
Aquatic Pollution
Atmospheric Protection/Air Quality Control/Air Pollution
Carbon
Carbon dioxide
Carbon Dioxide - analysis
Carbon dioxide emissions
Developing countries
Earth and Environmental Science
Economic Development
Ecotoxicology
Emissions
Energy consumption
Energy efficiency
Energy resources
Environment
Environmental Chemistry
Environmental economics
Environmental Health
Environmental impact
Environmental Pollution - analysis
Environmental science
Foreign investment
Growth models
Host country
Human capital
Humans
Hypotheses
International trade
Investments
LDCs
Middle East
Pollution
Pollution levels
Renewable resources
Research Article
Sustainable development
Thresholds
Waste Water Technology
Water Management
Water Pollution Control
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Summary:This paper studies whether foreign direct investment (FDI)-CO 2 emissions relationship may change depending on the data-driven estimated threshold levels for the country characteristics (CC) including human capital and governance in a sample of 13 Middle East and North Africa (MENA) economies during the 1996–2019 period. Our results strongly suggest that endogenously estimated CC thresholds matter for the impact of FDI on CO 2 emissions. The pollution haven hypothesis, which maintains that FDI is associated with higher levels of pollution, appears to be valid for economies with weak CC. In addition to this, the pollution halo argument suggesting FDI lowers the emissions appears to be hold in countries with strong CC. The results in this study may indicate that policies aiming to improve human capital and governance may be expected not only to increase the economic benefits of FDI in terms of growth but also mitigate the negative environmental impacts of FDI in the MENA region.
ISSN:1614-7499
0944-1344
1614-7499
DOI:10.1007/s11356-023-25188-1