DO FOREIGN DIRECT INVESTMENT IN IVORY COAST INCREASE CO2 EMISSIONS?

Abstract

Purpose- In this paper, we study, on the basis of an endogenous growth model, the effect of foreign direct investment on CO2 emissions in Ivory Coast from 1975 to 2014.

Methodology- The preferred econometric tool is the ARDL model.

Findings- The results show a positive relationship between CO2 emissions and FDI whose associated coefficient is significantly different from zero in the short term. This result suggests that the contribution of FDI to CO2 emissions is minimal. Indeed, if FDI increases by 1 point (100%) then CO2 emissions increase by 0.03%. In the long term, the results suggest that the increase in FDI will lead to an increase in pollution with an associated coefficient significantly different from zero. As in the short term, this result also shows that the contribution of FDI to CO2 emissions is minimal in the long term. A 1 point increase in FDI (100%) leads to an increase in CO2 emissions of 0.14%.

Conclusion- The improvement of the business, investment and trade climate in Ivory Coast, must be supported by social measures intended, in particular, to protect the health and safety of workers. Because environmental degradation due to an increase in emissions of CO2 supplies can have a negative impact on human health and bring about a decrease of economic growth.

Keywords

• Foreign direct investment,CO2 emissions,growth,ARDL,Ivory Coast

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