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The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector

The indirect role of foreign direct investment in environmental degradation has received little attention, and perhaps no study has yet shown the mediating role of financial development and economic growth in mediating the relationship between foreign direct investment and environmental degradation,...

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Main Authors: Muhammad Qamri, Ghulam, Sheng, Bin, Muhammad Adeel-Farooq, Rana, Alam, Gazi Mahabubul
Format: Article
Published: Elsevier 2022
Online Access:http://psasir.upm.edu.my/id/eprint/103487/
https://www.sciencedirect.com/science/article/pii/S0301420722002136
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spelling my.upm.eprints.1034872023-06-06T07:16:22Z http://psasir.upm.edu.my/id/eprint/103487/ The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector Muhammad Qamri, Ghulam Sheng, Bin Muhammad Adeel-Farooq, Rana Alam, Gazi Mahabubul The indirect role of foreign direct investment in environmental degradation has received little attention, and perhaps no study has yet shown the mediating role of financial development and economic growth in mediating the relationship between foreign direct investment and environmental degradation, especially in Asian economies, using panel data approaches for 21 Asian countries over the period of 1980–2018. Our findings show that foreign direct investment has a considerable positive impact on environmental quality through reducing pollutant levels. Economic growth is boosted greatly by foreign direct investment. Foreign direct investment, on the other hand, has a major negative impact on economic growth and financial development. Finally, both financial development and economic growth significantly negatively influence environmental degradation. According to the results of our study, in order to boost economic development and environmental quality, authorities should focus on the inflow of foreign direct investment. It is strongly recommended that policymakers reduce political involvement (Political stability) in the inflow of foreign direct investment, so that financial resources can be dispersed evenly in the industrial sector and nations can achieve a clean environment. Economic growth and financial development have been highlighted as mechanisms through which foreign direct investment influences carbon emissions. To enhance environmental sustainability, our study suggests that foreign direct investment be prioritized alongside investments in financial development. Elsevier 2022 Article PeerReviewed Muhammad Qamri, Ghulam and Sheng, Bin and Muhammad Adeel-Farooq, Rana and Alam, Gazi Mahabubul (2022) The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector. Resources Policy, 78. art. no. 102765. pp. 1-12. ISSN 0301-4207; ESSN: 1873-7641 https://www.sciencedirect.com/science/article/pii/S0301420722002136 10.1016/j.resourpol.2022.102765
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description The indirect role of foreign direct investment in environmental degradation has received little attention, and perhaps no study has yet shown the mediating role of financial development and economic growth in mediating the relationship between foreign direct investment and environmental degradation, especially in Asian economies, using panel data approaches for 21 Asian countries over the period of 1980–2018. Our findings show that foreign direct investment has a considerable positive impact on environmental quality through reducing pollutant levels. Economic growth is boosted greatly by foreign direct investment. Foreign direct investment, on the other hand, has a major negative impact on economic growth and financial development. Finally, both financial development and economic growth significantly negatively influence environmental degradation. According to the results of our study, in order to boost economic development and environmental quality, authorities should focus on the inflow of foreign direct investment. It is strongly recommended that policymakers reduce political involvement (Political stability) in the inflow of foreign direct investment, so that financial resources can be dispersed evenly in the industrial sector and nations can achieve a clean environment. Economic growth and financial development have been highlighted as mechanisms through which foreign direct investment influences carbon emissions. To enhance environmental sustainability, our study suggests that foreign direct investment be prioritized alongside investments in financial development.
format Article
author Muhammad Qamri, Ghulam
Sheng, Bin
Muhammad Adeel-Farooq, Rana
Alam, Gazi Mahabubul
spellingShingle Muhammad Qamri, Ghulam
Sheng, Bin
Muhammad Adeel-Farooq, Rana
Alam, Gazi Mahabubul
The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
author_facet Muhammad Qamri, Ghulam
Sheng, Bin
Muhammad Adeel-Farooq, Rana
Alam, Gazi Mahabubul
author_sort Muhammad Qamri, Ghulam
title The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
title_short The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
title_full The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
title_fullStr The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
title_full_unstemmed The criticality of FDI in environmental degradation through financial development and economic growth: implications for promoting the green sector
title_sort criticality of fdi in environmental degradation through financial development and economic growth: implications for promoting the green sector
publisher Elsevier
publishDate 2022
url http://psasir.upm.edu.my/id/eprint/103487/
https://www.sciencedirect.com/science/article/pii/S0301420722002136
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score 13.211869

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