Trade Openness, Domestic and Foreign Investments, and the Environment - Modern Economy

ME > Vol.7 No.5, May 2016

Trade Openness, Domestic and Foreign Investments, and the Environment ()

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Download as PDF (Size: 354KB) PP. 591-605

DOI: 10.4236/me.2016.75065 2,662 Downloads 4,060 Views Citations

Author(s)

Eskandar Elmarzougui^1,2*, Bruno Larue², Lota D. Tamini²

Affiliation(s)

¹Department of Economics, Laval University, Québec, Canada.
²Department of Agricultural Economics and Consumer Sciences, Laval University, Québec, Canada.

ABSTRACT

This paper studies the impact of growth, and trade and investment 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 show that Foreign Direct Investment (FDI) has detrimental effects on CO₂ emissions in Africa, the Middle East and North Africa, the former United Socialist Soviet Republic and Eastern Europe, and South America, but not in Asia where it seems to have beneficial effects. FDI raises SO₂ emissions in South America, although it does lower them in Africa. Local investment is contributing significantly to both CO₂ and SO₂ emission increases in most regions while trade openness reduces (increases) CO₂ in OECD countries (South America).

KEYWORDS

CO₂ and SO₂ Emissions, Domestic Investment, Foreign Direct Investment, Trade Openness, ARDL

Share and Cite:

Elmarzougui, E. , Larue, B. and Tamini, L. (2016) Trade Openness, Domestic and Foreign Investments, and the Environment. Modern Economy, 7, 591-605. doi: 10.4236/me.2016.75065.

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