FDI, Green Innovation and Environmental Quality Nexus: New Insights from BRICS Economies

Najabat Ali, Khamphe Phoungthong, Kuaanan Techato, Waheed Ali, Shah Abbas, Joshuva Arockia Dhanraj and Anwar Khan
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Khamphe Phoungthong: Environmental Assessment and Technology for Hazardous Waste Management Research Center, Faculty of Environmental Management, Prince of Songkla University, Songkhla 90110, Thailand
Kuaanan Techato: Environmental Assessment and Technology for Hazardous Waste Management Research Center, Faculty of Environmental Management, Prince of Songkla University, Songkhla 90110, Thailand
Waheed Ali: School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710000, China
Shah Abbas: Gongqing Institute of Science and Technology, Gongqing 332020, China
Joshuva Arockia Dhanraj: Centre for Automation and Robotics (ANRO), Department of Mechanical Engineering, Hindustan Institute of Technology and Science, Padur, Chennai 603103, India
Anwar Khan: School of Economics, Xiamen University, Xiamen 361005, China

Sustainability, 2022, vol. 14, issue 4, 1-17

Abstract: One major concern about foreign direct investment (FDI) is the potential negative environmental impact due to increased CO 2 emissions. However, there is a possibility that FDI mitigates CO 2 emissions through green innovation and creates a cleaner environment. In the existing literature, there is no significant empirical evidence on the linkage among FDI, green innovation and CO 2 emissions in the context of BRICS countries. Hence, this study aims to analyze the impact of FDI and green innovation on the environmental quality of BRICS economies for 1990–2014. The study employed Augmented Mean Group (AMG) estimators for empirical data analysis. The study’s findings depict that foreign direct investment, energy use, and economic growth have a significant and positive impact on the CO 2 emissions of BRICS economies. Moreover, green innovation has a significant inverse impact on CO 2 emissions. The results show bidirectional causalities between CO 2 emissions and green innovation, trade openness and CO 2 emissions, energy use and CO 2 emissions, and urbanization and CO 2 emissions. Additionally, the findings reveal a one-way causality from CO 2 emissions to GDP and CO 2 emissions to urbanization. This study offers essential policy recommendations for the environmental sustainability of BRICS countries through green innovation.

Keywords: foreign direct investment; green innovation; CO 2 emissions; BRICS; environmental sustainability; clean technology (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (31)

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