Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries
In selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO<sub>2</sub>), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary leas...
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2021-06-01
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Online Access: | https://www.mdpi.com/1996-1073/14/12/3470 |
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author | Xueqing Kang Farman Ullah Khan Raza Ullah Muhammad Arif Shams Ur Rehman Farid Ullah |
author_facet | Xueqing Kang Farman Ullah Khan Raza Ullah Muhammad Arif Shams Ur Rehman Farid Ullah |
author_sort | Xueqing Kang |
collection | DOAJ |
description | In selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO<sub>2</sub>), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models for estimation were used in the study, which covered yearly data from 1990 to 2019. We used Levin–Lin–Chu, Im–Pesaran–Shin, and Fisher PP tests for the stationarity of the variables. The outcomes of the panel cointegration approach looked at whether there was a long-run equilibrium nexus between selected variables in Pakistan, Bangladesh, India, and Sri Lanka. The FMOLS approach was also used to assess the relationship, and the results suggest that there is a significant and negative nexus between FDI and renewable energy in south Asian nations. The study’s findings reveal a strong and favorable relationship between GDP and renewable energy use. In South Asian nations (Sri Lanka, Pakistan, India, and Bangladesh), the FMOLS and DOLS findings are nearly identical, but the authors used the DOLS model for robustification. According to the findings, policymakers in South Asian economies (Sri Lanka, Pakistan, India, and Bangladesh) should view GDP and FDI as fundamental policy instruments for environmental sustainability. To reduce reliance on hazardous energy sources, the government should also reassure financial sectors to participate in renewable energy. |
first_indexed | 2024-03-10T10:29:29Z |
format | Article |
id | doaj.art-9e553dc6d0454489bbca6e6f0b7d6680 |
institution | Directory Open Access Journal |
issn | 1996-1073 |
language | English |
last_indexed | 2024-03-10T10:29:29Z |
publishDate | 2021-06-01 |
publisher | MDPI AG |
record_format | Article |
series | Energies |
spelling | doaj.art-9e553dc6d0454489bbca6e6f0b7d66802023-11-21T23:45:16ZengMDPI AGEnergies1996-10732021-06-011412347010.3390/en14123470Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian CountriesXueqing Kang0Farman Ullah Khan1Raza Ullah2Muhammad Arif3Shams Ur Rehman4Farid Ullah5Department of Financial Engineering, School of Economics, Sichuan University, No. 24, South Section 1, Yihuan Road, Chengdu 610065, ChinaDepartment of Management Sciences, COMSATS University Islamabad, Islamabad 45550, PakistanDepartment of Management Sciences, Islamia College University, Peshawar 25120, PakistanDepartment of Management Sciences, University of Swabi, Swabi 23430, PakistanDepartment of Management Science, Institute of Business and Management Sciences (IBMS), University of Agriculture, Peshawar 21530, PakistanDepartment of Financial Engineering, School of Economics, Sichuan University, No. 24, South Section 1, Yihuan Road, Chengdu 610065, ChinaIn selected South Asian countries, the study intends to investigate the relationship between urban population (UP), carbon dioxide (CO<sub>2</sub>), trade openness (TO), gross domestic product (GDP), foreign direct investment (FDI), and renewable energy (RE). Fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models for estimation were used in the study, which covered yearly data from 1990 to 2019. We used Levin–Lin–Chu, Im–Pesaran–Shin, and Fisher PP tests for the stationarity of the variables. The outcomes of the panel cointegration approach looked at whether there was a long-run equilibrium nexus between selected variables in Pakistan, Bangladesh, India, and Sri Lanka. The FMOLS approach was also used to assess the relationship, and the results suggest that there is a significant and negative nexus between FDI and renewable energy in south Asian nations. The study’s findings reveal a strong and favorable relationship between GDP and renewable energy use. In South Asian nations (Sri Lanka, Pakistan, India, and Bangladesh), the FMOLS and DOLS findings are nearly identical, but the authors used the DOLS model for robustification. According to the findings, policymakers in South Asian economies (Sri Lanka, Pakistan, India, and Bangladesh) should view GDP and FDI as fundamental policy instruments for environmental sustainability. To reduce reliance on hazardous energy sources, the government should also reassure financial sectors to participate in renewable energy.https://www.mdpi.com/1996-1073/14/12/3470renewable energytrade opennessFDIgross domestic product |
spellingShingle | Xueqing Kang Farman Ullah Khan Raza Ullah Muhammad Arif Shams Ur Rehman Farid Ullah Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries Energies renewable energy trade openness FDI gross domestic product |
title | Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries |
title_full | Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries |
title_fullStr | Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries |
title_full_unstemmed | Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries |
title_short | Does Foreign Direct Investment Influence Renewable Energy Consumption? Empirical Evidence from South Asian Countries |
title_sort | does foreign direct investment influence renewable energy consumption empirical evidence from south asian countries |
topic | renewable energy trade openness FDI gross domestic product |
url | https://www.mdpi.com/1996-1073/14/12/3470 |
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