Skip to main content

Advertisement

SpringerLink
Log in

Mediation of foreign direct investment and agriculture towards ecological footprint: a shift from single perspective to a more inclusive perspective for India

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

According to the Carbon Brief Profile report by Timperley (2019), India has been identified as the world’s 3rd largest emitter of greenhouse gases (GHGs) after China and the USA. Following the Paris Agreement and India’s pledge as among the stakeholders at the global climate talks and how fast India ratified the Paris Agreement within a year on the 2nd of October 2016, it is essential to investigate the country’s (India) commitment in reducing its emission towards enhancing a positive environmental performance. Both structural breaks, linear autoregressive distributed lag (ARDL) and nonlinear autoregressive distributed lag (NARDL), were selected simultaneously for this study, but at a later stage, after being bound to cointegration estimation, the NARDL was dropped because of its inability to sustain the claim of cointegration in the analysis. The rest of the analyses were based on liner ARDL model (short-run and long-run) with diagnostic tests, Granger causality estimation. Ecological Footprint (EFP) was chosen as an indicator to environment because of its richness in measuring the environmental performance. The linear (ARDL) output affirms a positive and significant link among ecological footprint and agriculture, energy use, and population with a negative link between ecological footprint (EFP) and foreign direct investment (FDI). The Granger causality test indicates a one-way transmission passing from agriculture, foreign direct investment, energy use, and population to ecological footprint. Also, a one-way transmission was found passing to economic growth (GDP) from foreign direct investment (FDI) and feedback transmission was found between FDI and energy use. This finding has an implication to both economic and environmental performances; hence, the policy framework should be targeting the enhancement of economy via the foreign direct investment and agriculture with a focus on energy use and environmental performance.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2

Similar content being viewed by others

References

  • Ali S, Yusop Z, Kaliappan SR, Chin L (2020) Dynamic common correlated effects of trade openness, FDI, and institutional performance on environmental quality: evidence from OIC countries. Environ Sci Pollut Res:1–12

  • Al-Mulali U, Saboori B, Ozturk I (2015) Investigating the environmental Kuznets curve hypothesis in Vietnam. Energy Policy 76:123–131

    Google Scholar 

  • Alola AA, Yalçiner K, Alola UV, Saint Akadiri S (2019) The role of renewable energy, immigration and real income in environmental sustainability target. Evidence from Europe largest states. Sci Total Environ 674:307–315

    CAS  Google Scholar 

  • Álvarez-Herránz A, Balsalobre D, Cantos JM, Shahbaz M (2017) Energy innovations-GHG emissions nexus: fresh empirical evidence from OECD countries. Energy Policy 101:90–100

    Google Scholar 

  • Bagliani M, Bravo G, Dalmazzone S (2008) A consumption-based approach to environmental Kuznets curves using the ecological footprint indicator. Ecol Econ 65(3):650–661

    Google Scholar 

  • Baloch MA, Zhang J, Iqbal K, Iqbal Z (2019) The effect of financial development on ecological footprint in BRI countries: evidence from panel data estimation. Environ Sci Pollut Res 26(6):6199–6208

    Google Scholar 

  • Banerjee A, Dolado J, Mestre R (1998) Error-correction mechanism tests for cointegration in a single-equation framework. J Time Ser Anal 19(3):267–283

    Google Scholar 

  • Bekun FV, Alola AA, Sarkodie SA (2019) Toward a sustainable environment: Nexus between CO2 emissions, resource rent, renewable and nonrenewable energy in 16-EU countries. Sci Total Environ 657:1023–1029

    CAS  Google Scholar 

  • Bello MO, Solarin SA, Yen YY (2018) The impact of electricity consumption on CO2 emission, carbon footprint, water footprint and ecological footprint: the role of hydropower in an emerging economy. J Environ Manag 219:218–230

    Google Scholar 

  • Danish, Wang Z (2018) Dynamic relationship between tourism, economic growth, and environmental quality. J Sustain Tour 26(11):1928–1943

    Google Scholar 

  • Destek MA, Okumus I (2019) Does pollution haven hypothesis hold in newly industrialized countries? Evidence from ecological footprint. Environ Sci Pollut Res 26(23):23689–23695

    Google Scholar 

  • Dickey DA, Fuller WA (1979) Distribution of the estimators for autoregressive time series with a unit root. J Am Stat Assoc 74(366a):427–431

    Google Scholar 

  • Dogan N (2016) Agriculture and environmental Kuznets curves in the case of Turkey: evidence from the ARDL and bounds test. Agric Econ 62(12):566–574

    Google Scholar 

  • Duman O, Özcan C, Polat TG, Tunç S (2019) Carbon nanotube-based magnetic and non-magnetic adsorbents for the high-efficiency removal of diquat dibromide herbicide from water: OMWCNT, OMWCNT-Fe3O4 and OMWCNT-κ-carrageenan-Fe3O4 nanocomposites. Environ Pollut 244:723–732

    CAS  Google Scholar 

  • Emir F, Bekun FV (2019) Energy intensity, carbon emissions, renewable energy, and economic growth nexus: new insights from Romania. Energy Environ 30(3):427–443

    Google Scholar 

  • Galli A (2015) On the rationale and policy usefulness of ecological footprint accounting: the case of Morocco. Environ Sci Pol 48:210–224

    Google Scholar 

  • Gokmenoglu KK, Taspinar N (2018) Testing the agriculture-induced EKC hypothesis: the case of Pakistan. Environ Sci Pollut Res 25(23):22829–22841

    Google Scholar 

  • Gregory AW, Hansen BE (1996) Practitioners corner: tests for cointegration in models with regime and trend shifts. Oxf Bull Econ Stat 58(3):555–560

    Google Scholar 

  • Grossman, G. M., & Krueger, A. B. (1991). Environmental impacts of a North American free trade agreement (No. w3914). National Bureau of Economic Research

  • Guangyue X, Deyong S (2011) An empirical study on the environmental Kuznets curve for China’s carbon emissions: based on provincial panel data. Chin J Population Res Environ 9(3):66–76

    Google Scholar 

  • Katircioğlu ST, Taşpinar N (2017) Testing the moderating role of financial development in an environmental Kuznets curve: empirical evidence from Turkey. Renew Sust Energ Rev 68:572–586

    Google Scholar 

  • Katircioglu S, Gokmenoglu KK, Eren BM (2018) Testing the role of tourism development in ecological footprint quality: evidence from top 10 tourist destinations. Environ Sci Pollut Res 25(33):33611–33619

  • Kuznets S (1955) Economic growth and income inequality. Am Econ Rev 45(1):1–28

    Google Scholar 

  • Kwiatkowski D, Phillips PC, Schmidt P, Shin Y (1992) Testing the null hypothesis of stationarity against the alternative of a unit root. J Econ 54(1–3):159–178

    Google Scholar 

  • Liu H, Kim H (2018) Ecological footprint, foreign direct investment, and gross domestic production: evidence of Belt & Road Initiative countries. Sustainabillity 10(10):3527

    Google Scholar 

  • Liu M, Huang Y, Ma Z, Jin Z, Liu X, Wang H, Liu Y, Wang J, Jantunen M, Bi J, Kinney PL (2017) Spatial and temporal trends in the mortality burden of air pollution in China: 2004–2012. Environ Int 98:75–81

    CAS  Google Scholar 

  • Lorente DB, Álvarez-Herranz A (2016a) Economic growth and energy regulation in the environmental Kuznets curve. Environ Sci Pollut Res 23(16):16478–16494

    Google Scholar 

  • Lorente DB, Alvarez-Herranz A (2016b) An approach to the effect of energy innovation on environmental Kuznets curve: An introduction to inflection point. Bulletin of Energy Economics 4(3):224–233

  • MacLean DA, MacKinnon WE (1996) Accuracy of aerial sketch-mapping estimates of spruce budworm defoliation in New Brunswick. Can J For Res 26(12):2099–2108

    Google Scholar 

  • Majeed MT, Mazhar M (2019) Financial development and ecological footprint: a global panel data analysis. Pakistan J Commerce Soc Sci 13(2):487–514

    Google Scholar 

  • Majeed MT, Mumtaz S (2017) Happiness and environmental degradation: a global analysis. Pakistan J Commerce Soc Sci 11(3):753–772

    Google Scholar 

  • Muḥammad, S., & Balsalobre, D. (Eds.). (2019). Energy and Environmental Strategies in the Era of Globalization. Springer.

  • Network, G. F. (2018). Ecological footprint: how the footprint works

  • Ozcan B, Tzeremes P, Dogan E (2019) Re-estimating the interconnectedness between the demand of energy consumption, income, and sustainability indices. Environ Sci Pollut Res 26(26), 26500–26516

  • Ozturk I, Al-Mulali U, Saboori B (2016) Investigating the environmental Kuznets curve hypothesis: the role of tourism and ecological footprint. Environ Sci Pollut Res 23(2):1916–1928

    Google Scholar 

  • Paramati SR, Apergis N, Ummalla M (2017) Financing clean energy projects through domestic and foreign capital: the role of political cooperation among the EU, the G20 and OECD countries. Energy Econ 61:62–71

    Google Scholar 

  • Pazienza P (2015) The relationship between CO2 and foreign direct investment in the agriculture and fishing sector of OECD countries: evidence and policy considerations. Intelektinė ekonomika 9(1):55–66

    Google Scholar 

  • Perron P (1990) Testing for a unit root in a time series with a changing mean. J Bus Econ Stat 8(2):153–162

    Google Scholar 

  • Pesaran MH, Shin Y (1998) An autoregressive distributed-lag modelling approach to cointegration analysis. Econ Soc Monographs 31:371–413

    Google Scholar 

  • Pesaran MH, Shin Y, Smith RJ (2001) Bounds testing approaches to the analysis of level relationships. J Appl Econ 16(3):289–326

    Google Scholar 

  • Rees WE (1992) Ecological footprints and appropriated carrying capacity: what urban economics leaves out. Environ Urban 4(2):121–130

    Google Scholar 

  • Rees, W. (2018). Ecological footprint. In: Companion to environmental studies, vol. 43, No. 48, pp. 43–48). Routledge in association with GSE research

  • Sarkodie SA, Strezov V (2019) Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Sci Total Environ 646:862–871

    CAS  Google Scholar 

  • Saint Akadiri S, Alola AA, Akadiri AC, et al (2019) Renewable energy consumption in EU-28 countries: Policy toward pollution mitigation and economic sustainability. Energy Policy 132:803-810

  • Shafik N, Bandyopadhyay S (1992) Economic growth and environmental quality: time-series and cross-country evidence, vol 904. World Bank Publications

  • Shahbaz M, Rahman MM (2012) The dynamic of financial development, imports, foreign direct investment and economic growth: cointegration and causality analysis in Pakistan. Glob Bus Rev 13(2):201–219

    Google Scholar 

  • Shahbaz, M., Jalil, A., & Dube, S. (2010). Environmental Kuznets curve (EKC): times series evidence from Portugal

  • Shahbaz M, Lean HH, Shabbir MS (2012) Environmental Kuznets curve hypothesis in Pakistan: cointegration and Granger causality. Renew Sust Energ Rev 16(5):2947–2953

    Google Scholar 

  • Shahbaz M, Mutascu M, Azim P (2013) Environmental Kuznets curve in Romania and the role of energy consumption. Renew Sust Energ Rev 18:165–173

    Google Scholar 

  • Shin Y, Yu B, Greenwood-Nimmo M (2014) Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework. In: Festschrift in honor of Peter Schmidt. Springer, New York, pp 281–314

    Google Scholar 

  • Sinha A, Shahbaz M, Balsalobre D (2017) Exploring the relationship between energy usage segregation and environmental degradation in N-11 countries. J Clean Prod 168:1217–1229

    Google Scholar 

  • Solarin SA, Bello MO (2018) Persistence of policy shocks to an environmental degradation index: the case of ecological footprint in 128 developed and developing countries. Ecological Indicators 89:35–44

  • Stock JH (1994) Unit roots, structural breaks and trends. Handb Econ 4:2739–2841

    Google Scholar 

  • Timperley, J. (2019). The carbon brief profile: India. Accessed on 14

  • Uddin GA, Salahuddin M, Alam K, Gow J (2017) Ecological footprint and real income: panel data evidence from the 27 highest emitting countries. Ecol Indic 77:166–175

    Google Scholar 

  • Udemba EN (2019) Triangular nexus between foreign direct investment, international tourism, and energy consumption in the Chinese economy: accounting for environmental quality. Environ Sci Pollut Res 26(24):24819–24830

    CAS  Google Scholar 

  • Udemba EN, Güngör H, Bekun FV (2019) Environmental implication of offshore economic activities in Indonesia: a dual analyses of cointegration and causality. Environ Sci Pollut Res 26(31):32460–32475

    Google Scholar 

  • Ullah A, Khan D, Khan I, Zheng S (2018) Does agricultural ecosystem cause environmental pollution in Pakistan? Promise and menace. Environ Sci Pollut Res 25(14):13938–13955

    CAS  Google Scholar 

  • Ulucak R, Lin D (2017) Persistence of policy shocks to ecological footprint of the USA. Ecol Indic 80:337–343

    Google Scholar 

  • Wackernagel, M. (1994). Ecological footprint and appropriated carrying capacity: a tool for planning toward sustainability. Doctoral dissertation, University of British Columbia

  • Wackernagel M, Rees W (1998) Our ecological footprint: reducing human impact on the earth, vol 9. New Society Publishers

  • Wackernagel M, Onisto L, Bello P, Linares AC, Falfán ISL, García JM et al (1999) National natural capital accounting with the ecological footprint concept. Ecol Econ 29(3):375–390

    Google Scholar 

  • Wang H, Zhang W, Chen L, Wang J, Liu T (2013) The contamination and control of biological pollutants in mass cultivation of microalgae. Bioresour Technol 128:745–750

  • World Bank (2018). The World Bank DataBank.

  • Zhang Z (2011) Energy and environmental policy in China: towards a low-carbon economy. Edward Elgar Publishing

  • Zhang WB (2018) Economic growth theory: capital, knowledge, and economic Stuctures. Routledge

  • Zivot EA, DWK Andrews (1992) Further evidence on the great crash, oil prices shock and the unit root hypothesis. Journal of Business and Economics Statistics 10(3):251–270

Download references

Funding

The author hereby declares that there is no form of funding received for this study.

Author information

Authors and Affiliations

  1. Faculty of Economics, Administrative and Social Sciences, Istanbul Gelisim University, Istanbul, Turkey

    Edmund Ntom Udemba

Authors
  1. Edmund Ntom Udemba
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Edmund Ntom Udemba.

Ethics declarations

Conflict of interest

The author declares that he has no conflict of interest.

Additional information

Responsible editor: Philippe Garrigues

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Highlights

• Mediation of the ecological footprint with agriculture and FDI for India.

• Comparison approach (with both linear and nonlinear ARDL) is employed

• Long- and short-run pollutant emission decomposition in India.

• Causality passing from agric, FDI, energy use, and population to ecological footprint.

• Feedback (two-way) transmission was found between FDI and energy use.

• Nexus among the selected variables is established.

• FDI, agriculture, and energy consumption influence pollutant emission.

• Energy portfolio diversification in India is more urgently necessary than ever.

Appendix

Appendix

Definition of terms

Terms

Full meaning

ARDL

Autoregressive distributed lag

NARDL

Nonlinear autoregressive distributed lag

FDI

Foreign direct investment

GC

Granger causality

GDP

Gross domestic product (rep. as GDP per capita)

EFP = ecological footprint

Ecological Footprint (The Global Footprint Network (2018) describes the ecological footprint as “a measure of how much area of biologically productive land and water an individual, population, or activity requires to produce all the resources it consumes and to absorb the waste it generates, using prevailing technology and resource management practices).”

CO2 = carbon emission

Carbon emission (according to World Bank (2018), carbon dioxide emissions are those stemming from the burning of fossil fuels and the manufacture of cement. They include carbon dioxide produced during consumption of solid, liquid, and gas fuels and gas flaring.)

Pollution = environmental degradation

According to Environmental Management (2017) “Environmental pollution is defined as ‘the contamination of the physical and biological components of the earth/atmosphere system to such an extent that normal environmental processes are adversely affected’.”

AIC

Akaike Information Criterion

ADF

Augmented Dickey-Fuller test

PP

Philip-Perron

KPSS

Kwiatkowski-Philip-Schmidt-Shin

EU

Energy use

DW

Durbin Watson

POP

Population

CUSUM and CUSUM square

Cumulative sum and cumulative sum square

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Udemba, E.N. Mediation of foreign direct investment and agriculture towards ecological footprint: a shift from single perspective to a more inclusive perspective for India. Environ Sci Pollut Res 27, 26817–26834 (2020). https://doi.org/10.1007/s11356-020-09024-4

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-020-09024-4

Keywords

JEL codes

Search

Navigation