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Foreign direct investment amidst global economic downturn: is there a time-varying implication for environmental sustainability targets?

Environmental Science and Pollution Research volume 28, pages 21359–21368 (2021)Cite this article

Abstract

Turkey attracted more foreign investment in a period when global foreign direct investment flows experienced a recession due to the USA-China trade war/tension coupled with structural issues within the EU nations. In this paper, the time-varying impact of foreign direct investment on environmental sustainability targets amidst global economic downturn was examined. To achieve this, a time-varying parameter approach, which adequately deals with potential parameter instabilities and nonlinearities, and effectively captures impact variations over time, was employed to investigate the impacts of increased foreign direct investment on environmental degradation amidst global economic downturn for the period 1970–2017. Results showed that the inflow of foreign direct investment (FDI), energy use, urbanization, and real income has led to environmental problems in Turkey. It is thus recommended that the government does the following: (i) enact policies that emphasize green FDI inflows, (ii) enforce tighter environmental policies that deter the immigration of dirty production processes,(iii) engage in mixed and country-specific environmental policies in combating pollution, (iv) ensure domestic investors to adhere strictly to the nation’s environmental policies, and (v) enact policies to foster mutual cooperation and understanding between the local and foreign stakeholders in a manner that drives the use of energy-saving technologies in production activities and the use of renewables in place of fossil fuels to control environmental hazards for both the immediate and future generations.

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Fig. 1

Data availability

We sourced all data from World Bank Development Database.

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Author information

Affiliations

  1. Department of Economics, Eastern Mediterranean University, via Mersin 10, Famagusta, Turkish Republic of Northern Cyprus, Cyprus

    Lucy Davou Philip & Kamil Sertoglu

  2. Research Department, Central Bank of Nigeria, Abuja, Nigeria

    Seyi Saint Akadiri

  3. School of Economics and Management, Nanchang University, Nanchang, China

    Godwin Olasehinde-Williams

Authors
  1. Lucy Davou Philip
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  2. Kamil Sertoglu
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  3. Seyi Saint Akadiri
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  4. Godwin Olasehinde-Williams
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Contributions

Seyi Akadiri: Responsible for the study development.

Lucy D. Choji: Sourced for data and carried out the estimations.

Godwin Olasehinde: Responsible for the methodology and empirical discussion.

Kamil Sertoglu: General manuscript development.

Corresponding author

Correspondence to Seyi Saint Akadiri.

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Appendix

Appendix

Table 4 Time-varying coefficient model
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Fig. 2
figure 2

The evolution of coefficient estimates of the impact of energy use on CO2 emissions in Turkey

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Fig. 3
figure 3

The evolution of coefficient estimates of the impact of urbanization on CO2 emissions in Turkey

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Fig. 4
figure 4

The evolution of coefficient estimates of the impact of urbanization on CO2 emissions in Turkey

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Philip, L.D., Sertoglu, K., Akadiri, S.S. et al. Foreign direct investment amidst global economic downturn: is there a time-varying implication for environmental sustainability targets?. Environ Sci Pollut Res 28, 21359–21368 (2021). https://doi.org/10.1007/s11356-020-12053-8

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  • DOI: https://doi.org/10.1007/s11356-020-12053-8

Keywords

  • Foreign direct investment
  • Environmental degradation
  • Time-varying parameter
  • Time series
  • Turkey