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Does FDI and Corruption affect Environmental Quality in Tunisia?

Author

Listed:
  • Mohamed Ali Hfaiedh

    (Faculty of Economic Sciences and Management of Mahdia, University of Monastir, Tunisia,)

  • Wajdi Bardi

    (Higher Institute of Management of Gabes, University of Gabes, Tunisia)

Abstract

This paper investigates the impact of foreign direct investment (FDI) and corruption on the environmental pollution in Tunisia over the period 1984 2014 by applying an autoregressive distributed lag model. Our results revealed the existence of Environmental Kuznets Curve in Tunisian case. The pollution haven hypothesis postulates that polluting industrial activity in developed countries is shifting to developing countries with less stringent environmental regulations. This hypothesis has been proved. Hence, this study advises to make more aware to the negative effect of corruption. Overall, to improve environmental quality, the findings suggest that Tunisia should promote energy efficiency with sustainable growth. Therefore, results show that Tunisia should encourage more FDI inflows particularly in technology- intensive and environment-friendly industries.

Suggested Citation

  • Mohamed Ali Hfaiedh & Wajdi Bardi, 2021. "Does FDI and Corruption affect Environmental Quality in Tunisia?," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 267-275.
    • Handle: RePEc:eco:journ2:2021-04-33
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    More about this item

    Keywords

    FDI; economic growth; CO2 emission; corruption; EKC hypothesis; ARDL model.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables

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