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DO FOREIGN DIRECT INVESTMENT IN IVORY COAST INCREASE CO2 EMISSIONS?

Year 2018, Volume: 7 Issue: 4, 346 - 358, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.995

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.

References

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  • Al-Mulali, U., Tang, C. F. (2013). Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries. Energy Policy, vol.60, p.813-819. DOI.org/10.1016/j.enpol.2013.05.055
  • Arouri, M. E. H., Youssef, A. B., M’henni, H., Rault C. (2012). Energy consumption, economic growth and CO2 emissions in Middle East and North African countries. Energy Policy, vol.45, p.342- 349. DOI.org/10.1016/j.enpol.2012.02.042
  • Aschieri, A. et Lelievre M. (2012). La fin des terres : comment mangerons-nous demain ? Editions Scrineo, 163p.
  • Bahmaid, S. S. (2013). Study on foreign direct investment in education. International Journal of Advanced Trends in Computer Science and Engineering, vol.2, n°1, p.519-531
  • Blanco, L., Gonzalez, F., Ruiz I. (2013). The impact of FDI on CO2 emissions in Latin America. Oxford Development Studies, vol.41, n°1, p.104-121. DOI. 10.1080/13600818.2012.732055
  • Borhan, H., Ahmed E. M., Hitam M. (2012). The impact of CO2 on economic growth in Asean 8. Procedia-Social and Behavioral Sciences, vol.35, p.389-397.
  • Brou, Y. T. (2010). Variabilité climatique, déforestation et dynamique agro-démographique en Côte d’Ivoire. Sécheresse, vol.21, n°4, p.1-6.
  • Dago, G. J. (2010). L'économie politique de l'investissement direct étranger (IDE) et le changement institutionnel : le cas de la Côte d'Ivoire. Thèse de doctorat en Sciences Economiques, Université Picardie Jules Verne d’Amiens (France).
  • Engle, R. F. et Granger, C. W. J. (1987). Cointegration and error correction representation : estimation and testing. Econometrica, vol.55, n°2, pp. 251-276.
  • Ghatak, S., Siddiki, J. (2001). The use of the ARDL approach in estimating virtual exchange rates in India. Journal of Applied Statistics, 28(5), 573-583.
  • Hitam, M., Borhan, H. (2012). FDI, growth and the environment : impact on quality of life in Malaysia. Procedia-Social and Behavioral Sciences, vol.50, p.333-342.
  • Ismaila, A. S. (2017). Foreign direct investment, education and economic growth in Nigeria. International Journal of Management Research & Review, vol.7, Issue 4, n°1, april, p.384-397
  • Kheder, B. S., Zugravu N. (2012). Environmental regulation and French firm location abroad: an economic geography model in an international comparative study. Ecological Economics, vol.77, p.48-61.
  • Kivyiro, P., Arminen, H. (2014). Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: causality analysis for Sub-Saharan Africa. Energy, 74, p.595-606. DOI.org/10.1016/j.energy.2014.07.025
  • Kizilkaya O. (2017). The impact of economic growth and foreign direct investment on CO2 emissions: the case of Turkey. Turkish Economic Review, vol.4, n°1, p.106-118.
  • Kyle, A. J., Miguel, D. R. (2015). Foreign direct investment and economic growth in Cote D’Ivoire: a time series analysis. Business and Economic Research, 5(2), p.35-47.
  • Lee, J. W., Brahmasrene, T. (2013). Investigating the influence of tourism on economic growth and carbon emissions: evidence from panel analysis of the European Union. Tourism Management, vol.38, p.69-76.
  • Leiter, A. M., Parolini, A., Winner, H. (2011). Environmental regulation and investment : evidence from European industry data. Ecological Economics, vol.70, n°4, p.759-770. DOI.org/10.1016/j.ecolecon.2010.11.013
  • Mercan, M., Karakaya, E. (2015). Energy consumption, economic growth and carbon emission: dynamic panel cointegration analysis for selected OECD countries. Procedia Economics and Finance, vol.23, p.587-592.
  • Morrissey, O., Udomkerdmongkol, M. (2012). Governance, private investment and foreign direct investment in developing countries. World Development, vol.40, n°3, p.437–445.
  • Mucuk, M., Demirsel M. T. (2013). The effect of foreign direct investments on unemployment : evidence from panel data for seven developing countries. Journal of Business, Economics & Finance, vol.2, n°3, p.53-66.
  • Mutenyo, J., Asmah E., Kalio A. (2010). Does foreign direct investment crowd-out domestic private investment in Sub-Saharan Africa?. The African Finance Journal, vol.12, n° 1, p. 27-52.
  • Narayan, P. (2005). The saving and investment nexus for Chile: evidence from cointegration tests. Applied Economics, 37(17), 1979-1990. DOI. 10.1080/00036840500278103
  • Nkechi, O. A. (2013). An econometric analysis of the impact of foreign direct investment on economic growth in Ghana: the role of human capital. International Journal of Humanities and Social Science Innovation, 2(8), p.12-20.
  • Pao, H., Tsai, C. (2011). Multivariate Granger causality b&ween CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): Evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy, vol.36, issue 1, p.685-693. DOI.org/10.1016/j.energy.2010.09.041
  • Pesaran, M. H., Shin, Y. (1999). An autoregressive distributed lag modeling approach to cointegration analysis. In Strom, S., Holly, A., Diamond, P. (Eds.), Centennial Volume of Rangar Frisch, Cambridge University Press, Cambridge.
  • Pesaran, M. H., Shin, Y., Smith, R.J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289-326. DOI. 10.1002/jae.616
  • Romer P. M. (1986) Increasing returns and long-run growth. The Journal of Political Economy, vol. 94, n°5, Oct., pp. 1002-1037.
  • Saray, M. O. (2011). The relationship of foreign direct investments and employment : Turkey case. Maliye Dergisi, n°161, p.381-403.
  • Strat, V. A., Davidescu A., Paul, A. M. (2015). FDI and the unemployment-a causality analysis for the latest EU members. Procedia Economics & Finance, 23, p.635-643.
  • Tano, A. Maxime (2012). Conflits fonciers & stratégies de sécurisation foncière au Sud-ouest ivoirien. Bulletin de l'Association de Géographes Français, 89ème année, (3), Terres & tensions en Afrique, pp. 486-498.
  • Tang, C. F., Tan, B. W. (2015). The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy, vol.79, p.447-454.
  • Thanh, L. T., Khuong N. D. (2017). Factors affecting CO2 emission in Vi&nam: a panel data analysis. Organizations and Markets in Emerging Economies, vol.8, n°2, p.244-257.
  • Toda, H. Y., Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, Vol. 66, pp. 225-250. DOI.org/10.1016/0304-4076(94)01616-8).
  • Wooldridge, J. M. (2006). Introductory econometrics: a modern approach. MIT Press, Cambridge, MA.
  • Zeren, F. (2015). The impact of foreign direct investment on CO2 emission: pollution halo or pollution haven hypothesis?. Journal of Yasar University, 10(37), p.6442-6448.
  • Zhang, Y. J. (2011). The impact of financial growth on carbon emissions: an empirical analysis in China. Energy Policy, 39, 2197–2203. DOI. 10.1016/j.enpol.2011.02.026
  • Zhang, C., Zhou, X. (2016). Does foreign direct investment lead to lower CO2 emissions ? Evidence from a regional analysis in China. Renewable and Sustainable Energy Reviews, vol.58, p.943-952.
  • Zivin, J. G., Neidell, M. (2012). The impact of pollution on worker productivity. America Economic Review, december, vol.102, n°7, p.3652-3673.
  • Zivot, E., Andrews, D. (1992). Further evidence of great crash, the oil price shock and unit root hypothesis. Journal of Business and Economic Statistics, vol.10, pp. 251-270.
Year 2018, Volume: 7 Issue: 4, 346 - 358, 30.12.2018
https://doi.org/10.17261/Pressacademia.2018.995

Abstract

References

  • Al-Mulali, U. (2012). Factors affecting CO2 emission in the Middle East: a panel data analysis. Energy, vol.44, issue 1, p.564-569. DOI.org/10.1016/j.energy.2012.05.045
  • Al-Mulali, U., Tang, C. F. (2013). Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries. Energy Policy, vol.60, p.813-819. DOI.org/10.1016/j.enpol.2013.05.055
  • Arouri, M. E. H., Youssef, A. B., M’henni, H., Rault C. (2012). Energy consumption, economic growth and CO2 emissions in Middle East and North African countries. Energy Policy, vol.45, p.342- 349. DOI.org/10.1016/j.enpol.2012.02.042
  • Aschieri, A. et Lelievre M. (2012). La fin des terres : comment mangerons-nous demain ? Editions Scrineo, 163p.
  • Bahmaid, S. S. (2013). Study on foreign direct investment in education. International Journal of Advanced Trends in Computer Science and Engineering, vol.2, n°1, p.519-531
  • Blanco, L., Gonzalez, F., Ruiz I. (2013). The impact of FDI on CO2 emissions in Latin America. Oxford Development Studies, vol.41, n°1, p.104-121. DOI. 10.1080/13600818.2012.732055
  • Borhan, H., Ahmed E. M., Hitam M. (2012). The impact of CO2 on economic growth in Asean 8. Procedia-Social and Behavioral Sciences, vol.35, p.389-397.
  • Brou, Y. T. (2010). Variabilité climatique, déforestation et dynamique agro-démographique en Côte d’Ivoire. Sécheresse, vol.21, n°4, p.1-6.
  • Dago, G. J. (2010). L'économie politique de l'investissement direct étranger (IDE) et le changement institutionnel : le cas de la Côte d'Ivoire. Thèse de doctorat en Sciences Economiques, Université Picardie Jules Verne d’Amiens (France).
  • Engle, R. F. et Granger, C. W. J. (1987). Cointegration and error correction representation : estimation and testing. Econometrica, vol.55, n°2, pp. 251-276.
  • Ghatak, S., Siddiki, J. (2001). The use of the ARDL approach in estimating virtual exchange rates in India. Journal of Applied Statistics, 28(5), 573-583.
  • Hitam, M., Borhan, H. (2012). FDI, growth and the environment : impact on quality of life in Malaysia. Procedia-Social and Behavioral Sciences, vol.50, p.333-342.
  • Ismaila, A. S. (2017). Foreign direct investment, education and economic growth in Nigeria. International Journal of Management Research & Review, vol.7, Issue 4, n°1, april, p.384-397
  • Kheder, B. S., Zugravu N. (2012). Environmental regulation and French firm location abroad: an economic geography model in an international comparative study. Ecological Economics, vol.77, p.48-61.
  • Kivyiro, P., Arminen, H. (2014). Carbon dioxide emissions, energy consumption, economic growth, and foreign direct investment: causality analysis for Sub-Saharan Africa. Energy, 74, p.595-606. DOI.org/10.1016/j.energy.2014.07.025
  • Kizilkaya O. (2017). The impact of economic growth and foreign direct investment on CO2 emissions: the case of Turkey. Turkish Economic Review, vol.4, n°1, p.106-118.
  • Kyle, A. J., Miguel, D. R. (2015). Foreign direct investment and economic growth in Cote D’Ivoire: a time series analysis. Business and Economic Research, 5(2), p.35-47.
  • Lee, J. W., Brahmasrene, T. (2013). Investigating the influence of tourism on economic growth and carbon emissions: evidence from panel analysis of the European Union. Tourism Management, vol.38, p.69-76.
  • Leiter, A. M., Parolini, A., Winner, H. (2011). Environmental regulation and investment : evidence from European industry data. Ecological Economics, vol.70, n°4, p.759-770. DOI.org/10.1016/j.ecolecon.2010.11.013
  • Mercan, M., Karakaya, E. (2015). Energy consumption, economic growth and carbon emission: dynamic panel cointegration analysis for selected OECD countries. Procedia Economics and Finance, vol.23, p.587-592.
  • Morrissey, O., Udomkerdmongkol, M. (2012). Governance, private investment and foreign direct investment in developing countries. World Development, vol.40, n°3, p.437–445.
  • Mucuk, M., Demirsel M. T. (2013). The effect of foreign direct investments on unemployment : evidence from panel data for seven developing countries. Journal of Business, Economics & Finance, vol.2, n°3, p.53-66.
  • Mutenyo, J., Asmah E., Kalio A. (2010). Does foreign direct investment crowd-out domestic private investment in Sub-Saharan Africa?. The African Finance Journal, vol.12, n° 1, p. 27-52.
  • Narayan, P. (2005). The saving and investment nexus for Chile: evidence from cointegration tests. Applied Economics, 37(17), 1979-1990. DOI. 10.1080/00036840500278103
  • Nkechi, O. A. (2013). An econometric analysis of the impact of foreign direct investment on economic growth in Ghana: the role of human capital. International Journal of Humanities and Social Science Innovation, 2(8), p.12-20.
  • Pao, H., Tsai, C. (2011). Multivariate Granger causality b&ween CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): Evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy, vol.36, issue 1, p.685-693. DOI.org/10.1016/j.energy.2010.09.041
  • Pesaran, M. H., Shin, Y. (1999). An autoregressive distributed lag modeling approach to cointegration analysis. In Strom, S., Holly, A., Diamond, P. (Eds.), Centennial Volume of Rangar Frisch, Cambridge University Press, Cambridge.
  • Pesaran, M. H., Shin, Y., Smith, R.J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289-326. DOI. 10.1002/jae.616
  • Romer P. M. (1986) Increasing returns and long-run growth. The Journal of Political Economy, vol. 94, n°5, Oct., pp. 1002-1037.
  • Saray, M. O. (2011). The relationship of foreign direct investments and employment : Turkey case. Maliye Dergisi, n°161, p.381-403.
  • Strat, V. A., Davidescu A., Paul, A. M. (2015). FDI and the unemployment-a causality analysis for the latest EU members. Procedia Economics & Finance, 23, p.635-643.
  • Tano, A. Maxime (2012). Conflits fonciers & stratégies de sécurisation foncière au Sud-ouest ivoirien. Bulletin de l'Association de Géographes Français, 89ème année, (3), Terres & tensions en Afrique, pp. 486-498.
  • Tang, C. F., Tan, B. W. (2015). The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy, vol.79, p.447-454.
  • Thanh, L. T., Khuong N. D. (2017). Factors affecting CO2 emission in Vi&nam: a panel data analysis. Organizations and Markets in Emerging Economies, vol.8, n°2, p.244-257.
  • Toda, H. Y., Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, Vol. 66, pp. 225-250. DOI.org/10.1016/0304-4076(94)01616-8).
  • Wooldridge, J. M. (2006). Introductory econometrics: a modern approach. MIT Press, Cambridge, MA.
  • Zeren, F. (2015). The impact of foreign direct investment on CO2 emission: pollution halo or pollution haven hypothesis?. Journal of Yasar University, 10(37), p.6442-6448.
  • Zhang, Y. J. (2011). The impact of financial growth on carbon emissions: an empirical analysis in China. Energy Policy, 39, 2197–2203. DOI. 10.1016/j.enpol.2011.02.026
  • Zhang, C., Zhou, X. (2016). Does foreign direct investment lead to lower CO2 emissions ? Evidence from a regional analysis in China. Renewable and Sustainable Energy Reviews, vol.58, p.943-952.
  • Zivin, J. G., Neidell, M. (2012). The impact of pollution on worker productivity. America Economic Review, december, vol.102, n°7, p.3652-3673.
  • Zivot, E., Andrews, D. (1992). Further evidence of great crash, the oil price shock and unit root hypothesis. Journal of Business and Economic Statistics, vol.10, pp. 251-270.
There are 41 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Maxime Tano Assi This is me

Publication Date December 30, 2018
Published in Issue Year 2018 Volume: 7 Issue: 4

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APA Assi, M. T. (2018). DO FOREIGN DIRECT INVESTMENT IN IVORY COAST INCREASE CO2 EMISSIONS?. Journal of Business Economics and Finance, 7(4), 346-358. https://doi.org/10.17261/Pressacademia.2018.995

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