Economic Growth, FDI, Tourism, and Agricultural Productivity as Drivers of Environmental Degradation: Testing the EKC Hypothesis in ASEAN Countries

Yuldoshboy Sobirov, Beruniy Artikov, Elbek Khodjaniyozov, Peter Marty () and Olimjon Saidmamatov ()
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Yuldoshboy Sobirov: Department of Accounting, Mamun University, Urgench 220100, Uzbekistan
Beruniy Artikov: Department of Accounting, Mamun University, Urgench 220100, Uzbekistan
Elbek Khodjaniyozov: Department of Business and Management, Urgench State University named after Abu Rayhan Beruni, Urgench 220100, Uzbekistan
Peter Marty: Institute of Natural Resource Sciences, Zurich University of Applied Sciences (ZHAW), 8820 Wädenswil, Switzerland
Olimjon Saidmamatov: Faculty of Socio-Economic Sciences, Urgench State University, Urgench 220100, Uzbekistan

Sustainability, 2025, vol. 17, issue 18, 1-24

Abstract: This study examines the long-run relationship between carbon dioxide (CO 2 ) emissions and key macroeconomic and sectoral drivers in ten ASEAN economies from 1995 to 2023. Employing Driscoll–Kraay standard errors, Prais–Winsten regression, heteroskedastic panel-corrected standard errors, Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Canonical Cointegrating Regression (CCR) estimators, the analysis accounts for cross-sectional dependence, slope heterogeneity, and endogeneity. Results indicate that GDP exerts a more-than-unitary positive effect on emissions, with a negative GDP-squared term supporting the Environmental Kuznets Curve. Agriculture raises emissions through land-use change and high-emission cultivation practices, while tourism shows a negative association likely reflecting territorial accounting effects. Trade openness increases emissions, highlighting the carbon intensity of export structures, whereas foreign direct investment exerts no significant net effect. These results suggest that ASEAN economies must accelerate renewable energy adoption, promote climate-smart agriculture, embed enforceable environmental provisions in trade policy, and implement rigorous sustainability screening for FDI to achieve low-carbon growth trajectories.

Keywords: ASEAN; CO 2 emissions; FMOLS; CCR; tourism; GDP; FDI (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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