The Effect of Foreign Direct Investment Inflows and Energy Consumption on Environmental Pollution in Sub-Saharan Africa

Winnie Thebuho, Lee-Ann Steenkamp and Pieter Opperman ()
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Pieter Opperman: Stellenbosch Business School, University of Stellenbosch, South Africa

Review of Development Finance Journal, 2024, vol. 14, issue 1, 57-71

Abstract: The interplay between FDI inflows, energy consumption and environmental pollution stems from the pollution haven hypothesis (PHH). These relationships were examined by analysing panel data for 21 sub-Saharan African (SSA) countries from 1990- 2016. More FDI inflows were found to worsen environmental pollution. However, when linked with relative income, more FDI inflows tended to lessen environmental pollution. Consequently, the existence of the PHH could not be unequivocally confirmed in SSA. The level of economic growth was also examined to assess the impact on environmental pollution. The validity of the Environmental Kuznets Curve (EKC) hypothesis was confirmed with an N-type relationship.

Keywords: Environmental kuznets curve; FDI; Pollution haven hypothesis; Sub-Saharan Africa (search for similar items in EconPapers)
JEL-codes: C23 O11 O13 Q40 Q50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:afj:journ3:v:14:y:2024:i:1:p:57-71

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