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Economic growth, FDI inflows and their impact on the environment: an empirical study for the MENA countries

Author

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  • Mohamed Abdouli

    (Faculty of Economics and Management of Sfax)

  • Sami Hammami

    (Faculty of Economics and Management of Sfax)

Abstract

The purpose of this paper is to explore the impact of economic growth, FDI inflows, trade openness and energy consumption on environmental degradation in 17 MENA countries. We did our analysis in the panel framework over the period 1990–2012 using both the static (OLS, FE and RE) and dynamic (Diff-GMM and Sys-GMM) panel data approaches. The results show significantly that the environmental Kuznets curve exists. Furthermore, the study indicates that foreign direct investment increases environmental degradation, i.e., pollution haven hypothesis exist and the increase in trade openness and energy consumption results in an increase in CO2 emissions. These empirical insights are of particular interest to policymakers as they help build sound economic policies, more energy conservation policies and foreign policies to improve environmental quality.

Suggested Citation

  • Mohamed Abdouli & Sami Hammami, 2017. "Economic growth, FDI inflows and their impact on the environment: an empirical study for the MENA countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(1), pages 121-146, January.
    • Handle: RePEc:spr:qualqt:v:51:y:2017:i:1:d:10.1007_s11135-015-0298-6
    DOI: 10.1007/s11135-015-0298-6
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