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Foreign direct investment and inclusive green growth in Africa: Energy efficiency contingencies and thresholds: Comment

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  • Acheampong, Alex O.

Abstract

In this paper, I provide an econometric audit and comment on the paper by Ofori, Gbolonyo, and Ojong (2023), which examined whether there is a synergy between energy efficiency and foreign direct investment in inclusive green growth using panel data for 23 African countries from 2000 to 2020. In their paper, the authors showed that the negative effect of foreign direct investment on environmental quality is reduced when conditioned by energy efficiency. The authors further presented threshold analysis, which showed that improving energy efficiency conditions foreign direct investment to improve inclusive green growth and socioeconomic sustainability. In this paper, I argue that their conditional effect hypothesis results, which are the basis of their paper, hold because of “model misspecification” and the “misreporting of some estimates.” Thus, after correcting for the misspecification, I found no significant synergistic and threshold effect of energy efficiency and foreign direct investment on inclusive green growth and socioeconomic sustainability. I also found evidence during the replication that some variables' coefficients and post-estimation statistics in the authors' paper are inconsistent with what I found. The flaws in the paper suggest that no appropriate conclusion and policy implications can be drawn from the paper.

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  • Acheampong, Alex O., 2023. "Foreign direct investment and inclusive green growth in Africa: Energy efficiency contingencies and thresholds: Comment," Energy Economics, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eneeco:v:126:y:2023:i:c:s0140988323005170
    DOI: 10.1016/j.eneco.2023.107019
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    References listed on IDEAS

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    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Ofori, Isaac K. & Gbolonyo, Emmanuel Y. & Ojong, Nathanael, 2023. "Foreign direct investment and inclusive green growth in Africa: Energy efficiency contingencies and thresholds," Energy Economics, Elsevier, vol. 117(C).
    3. Brambor, Thomas & Clark, William Roberts & Golder, Matt, 2006. "Understanding Interaction Models: Improving Empirical Analyses," Political Analysis, Cambridge University Press, vol. 14(1), pages 63-82, January.
    4. J. Daniel Khazzoom, 1980. "Economic Implications of Mandated Efficiency in Standards for Household Appliances," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 21-40.
    5. Brookes, L. G., 1992. "Energy efficiency and economic fallacies: a reply," Energy Policy, Elsevier, vol. 20(5), pages 390-392, May.
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