What Role Do Foreign Direct Investment and Technology Play in Shaping the Impact on Environmental Sustainability in Newly Industrialized Countries (NIC)?: New Evidence from Wavelet Quantile Regression

Nurcan Kilinc-Ata (), Serhat Camkaya and Samet Topal
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Nurcan Kilinc-Ata: Department of Economics and Finance, Sultan Qaboos University, P.O. Box 20, Muscat 123, Oman
Serhat Camkaya: Department of Economics, Kafkas University, Kars 36100, Türkiye
Samet Topal: Department of Economics, Kafkas University, Kars 36100, Türkiye

Sustainability, 2025, vol. 17, issue 11, 1-28

Abstract: This study investigates the roles of foreign direct investment (FDI) and technological innovation in influencing environmental sustainability across ten newly industrialized countries (NICs) over the period from 1990 to 2021. Using the wavelet quantile regression (WQR) approach, the analysis captures both the dynamic and heterogeneous relationships between FDI, technology, renewable energy, economic growth, financial development, and environmental outcomes across different quantiles and time scales. The results show that although economic expansion and foreign direct investment often help to lower CO 2 emissions, their impact varies across countries and time horizons. Technological innovation has a dual impact—contributing to emission reductions in the short term while potentially leading to increased environmental degradation over the long term. These results underscore the importance of aligning FDI inflows and technological advancement with environmental policies to ensure sustainable growth in NICs. This study makes significant empirical and policy contributions to the ongoing discourse on reconciling economic development with ecological preservation in emerging markets.

Keywords: environmental sustainability; foreign direct investment; technology; NIC (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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