Abstract
The main aim of the present study is to examine the possible nonlinear relations between foreign direct investments and environmental deterioration for subpanels separated according to the income levels of countries by using the classification made by the World Bank. Total energy consumption, economic growth, and renewable energy share are also considered as determinants of environmental deterioration in the model. Cross-sectional dependence is observed; hence, appropriate panel data unit root and cointegration tests are utilized for which results pointed out mixed integration order. Pooled mean group (PMG) estimator panel auto-regressive distributed lag (ARDL, hereafter) approach is adapted to observe short- and long-run relationships between the variables. Long-run results supported the pollution haven hypothesis as foreign direct investments caused an increase in ecological footprint. Findings are sensitive to different income levels of the subpanels of countries. This empirical study suggests tailored policymaking for every income level subpanel to ensure sustainable development.
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Availability of data and materials
The first dataset analyzed during the current study is publicly available in the World Bank data repository under World Development Indicators (WDI, hereafter) database. The second dataset which is used to get EFP data is taken from Global Footprint Network (GFN). The websites for relevant datasets are provided below. The first dataset does not require any membership to be provided, while the latter one requires free membership.
Tables 1 and 3 are prepared by using both datasets for the countries mentioned in Table 11 for the period of 1990–2014 yearly data. Tables 4–11 show the analyses results reached by using both datasets in their natural logarithm forms. Figure 1 is constructed by using only WDI dataset.
https://databank.worldbank.org/source/world-development-indicators
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SC and BBB designed the research setting, analyzed and interpreted the data, and inferred the results together. All authors read and approved the final manuscript.
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Baskurt, B.B., Celik, S. & Aktan, B. Do foreign direct investments influence environmental degradation? Evidence from a panel autoregressive distributed lag model approach to low-, lower-middle-, upper-middle-, and high-income countries. Environ Sci Pollut Res 29, 31311–31329 (2022). https://doi.org/10.1007/s11356-021-17822-7
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DOI: https://doi.org/10.1007/s11356-021-17822-7