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The Relationship between Inward Foreign Direct Investment, Economic Growth and Carbon Emissions: A Case of Italy from G7 Countries

Author

Listed:
  • Farrukh Nawaz

    (Faculty of Business Studies, Arab Open University, Riyadh, Saudi Arabia)

  • Misbah Sadiq

    (College of Business Administration, Umm Al Quwain University, United Arab Emirates)

  • Mohammad Salem Oudat

    (College of Business Administration, Umm Al Quwain University, United Arab Emirates)

  • Khalil Abu Saleem

    (Faculty of Business Studies, Arab Open University, Riyadh, Saudi Arabia)

  • Umar Kayani

    (College of Business, Al Ain University, Abu Dhabi, United Arab Emirates)

  • Mrestyal Khan

    (Department of Management Sciences, Balochistan University of Information Technology, Engineering and Management Sciences, Quetta, Pakistan)

Abstract

Recently, a significant amount of carbon dioxide emissions has grabbed the attention of global community. Thus, this study attempts to investigate the impact of inward foreign direct investment, and economic growth on carbon dioxide emissions in case of Italy. We took Italy as our sample country as it has committed to achieve carbon neutrality by 2050. We took annual time series data for the dependent variable (CO2) and explanatory variables (GDP, FDI, Natural Resources) for the period ranging from 1990 to 2021. To examine the long run relationship between the variables we used autoregressive distributed lags bounds test of cointegration. The empirical findings revealed the existence of long-run relationships among the variables of the model. Furthermore, we also found that natural resources unidirectionally caused CO2 and GDP.

Suggested Citation

  • Farrukh Nawaz & Misbah Sadiq & Mohammad Salem Oudat & Khalil Abu Saleem & Umar Kayani & Mrestyal Khan, 2024. "The Relationship between Inward Foreign Direct Investment, Economic Growth and Carbon Emissions: A Case of Italy from G7 Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 19-25, September.
    • Handle: RePEc:eco:journ2:2024-05-3
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    More about this item

    Keywords

    Foreign Direct Investment; Economic Growth; Carbon Neutrality; Italy; Autoregressive Distributed Lag;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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