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Examining the asymmetric effects of fossil fuel consumption, foreign direct investment, and globalization on ecological footprint in Mexico

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  • Babatunde S. Eweade
  • Selin Karlilar
  • Ugur Korkut Pata
  • Ibrahim Adeshola
  • John O. Olaifa

Abstract

This paper investigates the asymmetric effects of fossil fuels, foreign direct investment (FDI), and globalization on the ecological footprint (EFP) in Mexico from 1975 to 2020. To this end, the Autoregressive Distributed Lag (ARDL), Nonlinear Autoregressive Distributed Lag (NARDL), and the wavelet coherence approach are conducted. Based on the outcomes of the ARDL method, economic growth and fossil fuel consumption lead to ecological degradation, while foreign direct investment improves environmental conditions. Globalization has no impact on the environment. The NARDL approach illustrates that a positive shock to fossil fuels, FDI, and globalization degrades the environment. The wavelet coherence results emphasize the adverse environmental influence of economic growth and fossil fuels. These results imply that the Mexican government should conduct its economic expansion considering the principle of sustainable development. In this context, policymakers should propagate carbon taxes and similar instruments to promote clean energy sources that can replace fossil fuels and are compatible with sustainable development policies.

Suggested Citation

  • Babatunde S. Eweade & Selin Karlilar & Ugur Korkut Pata & Ibrahim Adeshola & John O. Olaifa, 2024. "Examining the asymmetric effects of fossil fuel consumption, foreign direct investment, and globalization on ecological footprint in Mexico," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 2899-2909, August.
    • Handle: RePEc:wly:sustdv:v:32:y:2024:i:4:p:2899-2909
    DOI: 10.1002/sd.2825
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    2. Sodiq Abiodun Oladipupo & Folorunsho M. Ajide, 2024. "Environmental effect of Chinese FDI in Africa: Evidence from pooled mean group," Sustainable Development, John Wiley & Sons, Ltd., vol. 32(4), pages 3569-3580, August.
    3. Emrah Kocak & Mohammed Alnour, 2025. "The path to China's zero‐carbon target: Implications for the relationship between de‐coal, economic output, and carbon dioxide emissions," Sustainable Development, John Wiley & Sons, Ltd., vol. 33(1), pages 100-112, February.

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