The impact of foreign direct investment on CO2 emissions in middle east and north African countries in the period 1990-2020: using the panel ARDL model

Nacer Mebrek (), Bilal Louail () and Siham Riache ()
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Nacer Mebrek: University of Tissemsilt
Bilal Louail: Northern Border University
Siham Riache: Northern Border University

Letters in Spatial and Resource Sciences, 2025, vol. 18, issue 1, No 4, 23 pages

Abstract: Abstract To determine whether foreign direct investment (FDI) promotes environmental degradation or aids in the adoption of cleaner technology between 1990 and 2020, the article will examine the relationship between FDI and CO2 emissions in MENA nations. utilizing the Panel ARDL Model to investigate both immediate and long-term impacts. The analysis discovered a long-term positive correlation between GDP, CO2 emissions, population increase, power consumption, and FDI. Open trade lowers emissions. The GDP and power consumption were found to considerably increase emissions in the short-term coefficients; however, the Error Correction Term indicated a slow adjustment to equilibrium. Policymakers should support clean technology, control foreign direct investment in industries that pollute, and support trade liberalization. In MENA and East Asia. This study contributes to the literature by investigating the environmental impact of FDI inflows in the MENA countries, a region that has been relatively unexplored in the context of this topic. The study departs from the usual economic effects of FDI and narrows down to how FDI affects the level of CO2 emissions, considering both the short- and long-run effects. This work investigates the environmental consequences of FDI using advanced econometric models, such as the Panel ARDL, to contribute to more sustainable policy recommendations.

Keywords: Foreign direct investment; CO2 emissions; MENA countries; Sustainable development; Panel ARDL model (search for similar items in EconPapers)
JEL-codes: C23 F21 O13 Q53 Q56 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12076-025-00400-7

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