Causal interactions between CO2 emissions, FDI, and economic growth: Evidence from dynamic simultaneous-equation models

Anis Omri (), Duc Khuong Nguyen and Christophe Rault

MPRA Paper from University Library of Munich, Germany

Abstract: In this article, we investigate the causality links between CO2 emissions, foreign direct investment, and economic growth using dynamic simultaneous-equation panel data models for a global panel of 54 countries over the peri-od 1990–2011. We also implement these empirical models for 3 regional sub-panels: Europe and Central Asia, Latin America and the Caribbean, and the Middle East, North Africa, and sub-Saharan Africa. Our results pro-vide evidence of bidirectional causality between FDI inflows and economic growth for all the panels and be-tween FDI and CO2 for all the panels, except Europe and North Asia. They also indicate the existence of unidi-rectional causality running from CO2 emissions to economic growth, with the exception of the Middle East, North Africa, and sub-Sahara panel, for which bidirectional causality between these variables cannot be rejected. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development.

Keywords: CO2 emissions; FDI inflows; economic growth (search for similar items in EconPapers)
JEL-codes: C3 C33 C5 C51 E22 O1 O13 (search for similar items in EconPapers)
Date: 2014-08-06, Revised 2014-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (194)

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Journal Article: Causal interactions between CO2 emissions, FDI, and economic growth: Evidence from dynamic simultaneous-equation models (2014)
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