Exploring the role of biomass energy consumption, ecological footprint through FDI and technological innovation in B&R economies: A simultaneous equation approach

• Published in: Energy (Oxford) Vol. 244; p. 122703
• Main Authors: Yasmeen, Rizwana, Zhaohui, Cui, Hassan Shah, Wasi Ul, Kamal, Muhammad Abdul, Khan, Anwar
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.04.2022; Elsevier BV
• Subjects: Algorithms; Belt & road economies; Biomass; Biomass energy; Biomass energy production; Ecological effects; Ecological footprint; Empirical analysis; Energy consumption; Energy efficiency; Energy policy; Footprint analysis; Foreign direct inflow; Foreign investment; Heterogeneity; Innovations; International financing; Natural resources; Population density; Roads; Robust control; Simultaneous equations; Spatial analysis; STIRPAT Model; Sustainability; Technological change; Technological innovation; Technological innovation; Belt & road economies; Ecological footprint; STIRPAT Model; Biomass energy; Foreign direct inflow
• ISSN: 0360-5442; 1873-6785
• DOI: 10.1016/j.energy.2021.122703

Foreign direct investment can be a way to promote modern energy-efficient technology in Belt & Road countries, and this aspect has yet to be explored. Therefore, we set three simultaneous equations to determine the role of foreign direct investment inflow, technological innovations, natural resources, population density on biomass energy consumption, and ecological footprint. We applied a novel panel algorithm, cross-sectionally augmented Autoregressive Distributed Lags, and Driscoll & Kraay methods for 52 Belt & Road panel countries from 1992 to 2017, which provides a more robust analysis by controlling spatial dependency and heterogeneity. The empirical results depict that biomass energy consumption improves the environment of the Belt & Road region, as ecological footprint and biomass energy consumption yielded a negative relationship. However, FDI supports the ‘Pollution Haven’ hypothesis for the Belt & Road economies. The results further infer that the ecological footprint can be lowered in the economies by technological advancement. From the policy perspective, our findings suggest that policymakers in Belt & Road economies should devise comprehensive foreign investment and modern biomass energy policies aiming at cleaner industrial practices that ensure environmental sustainability. •Biomass Energy, foreign direct investment and ecological footprint are examined.•Biomass energy consumption lowers the ecological footprint.•Foreign direct investment does not improve the environment in Belt & Road region.•The ‘Pollution Haven’ Hypothesis is validated for the region.•Technological advancements improve the environment in Belt & Road economies.