Does FDI and economic growth harm environment? Evidence from selected West African countries

• Published in: Transnational corporations review Vol. 13; no. 2; pp. 237 - 251
• Main Authors: Halliru, Ahmed Malumfashi, Loganathan, Nanthakumar, Golam Hassan, Asan Ali
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier B.V 01.06.2021; Routledge; Elsevier Limited
• Subjects: Carbon dioxide; Economic growth; Emissions; Energy consumption; FDI; Foreign investment; Human capital; West Africa; West Africa; human capital; Q01; economic growth; West Africa; FDI; energy consumption; C50; Q52
• ISSN: 1925-2099; 1918-6444; 1925-2099
• DOI: 10.1080/19186444.2020.1854005

This study examines the effect of FDI, economic growth, energy consumption, human capital and biocapacity on carbon emissions in selected West African countries over the period 1970–2017. Employing the long run cointegration estimators, the empirical results confirmed the existence of U-shaped and N-shaped pattern between the estimated variables on CO2 emissions. However, the panel quantile estimates revealed that N-shaped exists only for high carbon emissions countries, but not in the middle and low carbon emissions nations. In addition, the results provide evidence of inverted U-shaped relationship between growth and CO2 emissions and this point to the fact that the EKC hypothesis is valid for ECOWAS countries. The panel quantile causality results indicated that FDI, biocapacity, energy consumption and human capital cause carbon emissions in all the estimated quantiles. The study provided suggestions for policymaking towards reducing carbon emissions in the region.