FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES

Foreign direct investments (FDI), which are very important in the economic development of countries, prefer regions with free trade. Since the share of international trade in the world economy is constantly increasing, trade openness and foreign direct investments have become more important for cou...

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Autores principales:	Ahmet Kamaci, Ekrem Gul, Mustafa Torusdag
Formato:	article
Lenguaje:	ES
Publicado:	Universidad del Quindio 2021
Materias:	Carbon emission foreign direct investment (FDI) trade openness environmental Kuznets curve pollution haven hypothesis halo effect Technology (General) T1-995 General Works A Social sciences (General) H1-99
Acceso en línea:	https://doaj.org/article/66fda4838468423f994645de07abc455
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spelling	oai:doaj.org-article:66fda4838468423f994645de07abc4552021-11-06T03:08:41ZFOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES10.33975/riuq.vol33n2.6371794-631X2500-5782https://doaj.org/article/66fda4838468423f994645de07abc4552021-10-01T00:00:00Zhttps://ojs.uniquindio.edu.co/ojs/index.php/riuq/article/view/637https://doaj.org/toc/1794-631Xhttps://doaj.org/toc/2500-5782 Foreign direct investments (FDI), which are very important in the economic development of countries, prefer regions with free trade. Since the share of international trade in the world economy is constantly increasing, trade openness and foreign direct investments have become more important for countries. However, the increase in trade and FDI entries can have negative effects on the environment. Although many different variables are included in the literature as determinants of carbon emission, foreign direct investments are mostly taken as an explanatory variable with the effect of the economic globalization process. The aim of this paper is to analyze the relationship between FDI, trade openness and CO2 emission for the 1995-2019 period in 24 EU countries. The relationship between variables was estimated by applying panel AMG estimator and Emirmahmutoglu and Kose causality tests to series with cross-sectional dependency. Empirical results for the overall panel show that there is unidirectional causality from carbon emission to trade openness and FDI. There is a directional causality from FDI to trade openness for the general panel has been determined. When analyzed on a country basis, there is unidirectional causality from carbon emission to trade openness for Bulgaria, Italy, Latvia, Poland, Portugal and Slovenia. Likewise, for Austria, Denmark, Estonia, Finland, France, Germany, Poland, Portugal, Spain and Switzerland, there is unidirectional causality from carbon emission to FDI. In addition, when analyzed on a country basis, there is a one-way causality relationship from foreign direct investments to trade openness for Bulgaria, Italia, Latvia, Poland, Portugal and Slovenia. For Bulgaria, Finland and Germany, there is a one-way causality from trade openness to foreign direct investment. The importance of this study derives from the emphasis on the need for environmentally protective FDIs to reduce carbon emissions. Ahmet KamaciEkrem GulMustafa TorusdagUniversidad del QuindioarticleCarbon emissionforeign direct investment (FDI)trade opennessenvironmental Kuznets curvepollution haven hypothesishalo effectTechnology (General)T1-995General WorksASocial sciences (General)H1-99ESRevista de Investigaciones Universidad del Quindío, Vol 33, Iss 2 (2021)
institution	DOAJ
collection	DOAJ
language	ES
topic	Carbon emission foreign direct investment (FDI) trade openness environmental Kuznets curve pollution haven hypothesis halo effect Technology (General) T1-995 General Works A Social sciences (General) H1-99
spellingShingle	Carbon emission foreign direct investment (FDI) trade openness environmental Kuznets curve pollution haven hypothesis halo effect Technology (General) T1-995 General Works A Social sciences (General) H1-99 Ahmet Kamaci Ekrem Gul Mustafa Torusdag FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
description	Foreign direct investments (FDI), which are very important in the economic development of countries, prefer regions with free trade. Since the share of international trade in the world economy is constantly increasing, trade openness and foreign direct investments have become more important for countries. However, the increase in trade and FDI entries can have negative effects on the environment. Although many different variables are included in the literature as determinants of carbon emission, foreign direct investments are mostly taken as an explanatory variable with the effect of the economic globalization process. The aim of this paper is to analyze the relationship between FDI, trade openness and CO2 emission for the 1995-2019 period in 24 EU countries. The relationship between variables was estimated by applying panel AMG estimator and Emirmahmutoglu and Kose causality tests to series with cross-sectional dependency. Empirical results for the overall panel show that there is unidirectional causality from carbon emission to trade openness and FDI. There is a directional causality from FDI to trade openness for the general panel has been determined. When analyzed on a country basis, there is unidirectional causality from carbon emission to trade openness for Bulgaria, Italy, Latvia, Poland, Portugal and Slovenia. Likewise, for Austria, Denmark, Estonia, Finland, France, Germany, Poland, Portugal, Spain and Switzerland, there is unidirectional causality from carbon emission to FDI. In addition, when analyzed on a country basis, there is a one-way causality relationship from foreign direct investments to trade openness for Bulgaria, Italia, Latvia, Poland, Portugal and Slovenia. For Bulgaria, Finland and Germany, there is a one-way causality from trade openness to foreign direct investment. The importance of this study derives from the emphasis on the need for environmentally protective FDIs to reduce carbon emissions.
format	article
author	Ahmet Kamaci Ekrem Gul Mustafa Torusdag
author_facet	Ahmet Kamaci Ekrem Gul Mustafa Torusdag
author_sort	Ahmet Kamaci
title	FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
title_short	FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
title_full	FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
title_fullStr	FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
title_full_unstemmed	FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES
title_sort	foreign direct investments, trade openness and co2 emissions relationship: the case of 1995-2019 eu countries
publisher	Universidad del Quindio
publishDate	2021
url	https://doaj.org/article/66fda4838468423f994645de07abc455
work_keys_str_mv	AT ahmetkamaci foreigndirectinvestmentstradeopennessandco2emissionsrelationshipthecaseof19952019eucountries AT ekremgul foreigndirectinvestmentstradeopennessandco2emissionsrelationshipthecaseof19952019eucountries AT mustafatorusdag foreigndirectinvestmentstradeopennessandco2emissionsrelationshipthecaseof19952019eucountries
_version_	1718443984408281088

FOREIGN DIRECT INVESTMENTS, TRADE OPENNESS AND CO2 EMISSIONS RELATIONSHIP: THE CASE OF 1995-2019 EU COUNTRIES

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