Determining the environmental effect of Chinese FDI on the Belt and Road countries CO2 emissions: an EKC-based assessment in the context of pollution haven and halo hypotheses

Liu P., Ur Rahman Z., Jóźwik B., DOĞAN M.

Environmental Sciences Europe, cilt.36, sa.1, 2024 (SCI-Expanded) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 36 Sayı: 1
  • Basım Tarihi: 2024
  • Doi Numarası: 10.1186/s12302-024-00866-0
  • Dergi Adı: Environmental Sciences Europe
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus, IBZ Online, Agricultural & Environmental Science Database, Aquatic Science & Fisheries Abstracts (ASFA), BIOSIS, CAB Abstracts, Environment Index, Geobase, Pollution Abstracts, Veterinary Science Database, Directory of Open Access Journals
  • Anahtar Kelimeler: BRI, Chinese outward FDI, CO2e, EKC, Renewable energy
  • Bilecik Şeyh Edebali Üniversitesi Adresli: Evet

Özet

This work aims to examines the effect of Chinese outward foreign direct investment (CoFDI), renewable energy, and energy intensity on CO2 emissions in 46 Belt and Road Initiative (BRI) nations divided into: Panel A, consisting of 16 European countries, and Panel B, comprising 30 Asian and MENA countries. This analysis used data from 2005 to 2018, applying second-generation econometric techniques. The empirical outcomes, obtained using Driscoll–Kraay methods, confirmed the pollution halo effect in Panel A, suggesting that FDI flows in these countries are environmentally friendly. In contrast, the results indicated a positive impact of CoFDI on CO2e in Panel B, supporting the pollution haven hypothesis that FDI may add to pollution. In addition, the study found an inverted-U-shaped association between per capita income and CO2e, validating the environmental Kuznets curve (EKC) hypothesis in both panels. The findings also revealed that energy intensity positively affects CO2e, whereas renewable energy has a significant negative effect in both panels, while the interaction terms of renewable and energy intensity are heterogenous in both panels. Based on these findings, the study recommends policy makers of these countries to attract clean FDI, particularly in renewable sectors, and shift from fossil fuel-based energy to renewable sources to control pollution by enacting energy-saving initiatives via lowering energy intensity.