Mitigating carbon emissions: the role of Chinese foreign direct investment in Ghana

Justice Gyimah (), Ujunwa Angela Nwigwe (), George Nyantakyi () and Xilong Yao ()
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Justice Gyimah: Taiyuan University of Technology
Ujunwa Angela Nwigwe: Taiyuan University of Technology
George Nyantakyi: Zhongnan University of Economics and Law
Xilong Yao: Taiyuan University of Technology

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2025, vol. 27, issue 5, No 43, 10895-10908

Abstract: Abstract Carbon emissions mitigation has been a global battle for the past decades. Globalization is argued to be one of the causes of carbon emissions in developing countries despite its contribution to economic development. Therefore, investigating the effect of Foreign Direct Investment on carbon emissions is highly recommended for policymaking. The study employs the generalized method of moments to analyze the effect of Chinese foreign direct investment in Ghana, revenues which Ghana government earns from Chinese construction companies, and Chinese exports to Ghana on Ghana’s carbon emissions. The data for the study is from 2000 to 2020. The results confirmed the pollution halo hypothesis establishing that Chinese foreign direct investment mitigates carbon emissions. Chinese foreign direct investment has a negative significant effect on carbon emissions in Ghana. However, exports from China worsen environmental degradation. Revenue from Chinese companies is insignificant to affect carbon emissions. Based on the result of the study, globalization should be viewed from two directions by policymakers to implement regulations needed to tackle both directions.

Keywords: Foreign direct investment; Exports; Carbon emissions; Construction revenue; Environmental sustainability (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10668-023-04336-0

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