The nexus between FDI and environmental sustainability in North Africa

Marwa Lazreg () and Ezzeddine Zouari
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Marwa Lazreg: Université de Sousse, FSEG, CML

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Abstract: This paper provides a study of the relationship between sustainable development and foreign direct investment (FDI) from an empirical point of view in the case of the North African country during the period from 1985 to 2005. We used the FMOLS estimate and the causality test to examine this relationship. According to the results found, we confirmed the existence of a cointegration relationship between the different series studied in this paper. Indeed, the results of the null hypothesis test of no cointegration were rejected at the 5% threshold, which explains the presence of a cointegration relationship. The cointegration test can determine the use of a model error correction. Also, to test the effect of FDI on sustainable development in the countries of North Africa, we will make an estimate by FMOLS method. We found that the LIDE variable measuring foreign direct investment has a positive impact on sustainable development. Also, we notice that there is a bidirectional relationship between FDI and emissions CO2 Granger. That is to say, the IDE can cause Granger emissions of CO2 and CO2 emissions can cause Granger FDI.

Keywords: foreign direct investment; sustainable development; CO2; Poverty; panel data (search for similar items in EconPapers)
Date: 2018-04-02
New Economics Papers: this item is included in nep-ara, nep-env and nep-int
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