Effect of Economic Growth and Foreign Direct Investment on Carbon emission in the Asian States

Toto Gunarto


This research article analyzes the relationship between carbon dioxide gas emission, economic development, energy consumption and FDI in Asian states. The Autoregressive Distribution of Lag bounds tests has been applied for co-integration from 1970 to 2014. According to the results, there is a direct relationship between energy consumption and carbon dioxide gas emission. Moreover, there is no existence of a significant relationship between FDI and gas emission of carbon dioxide. In the long run, the coefficient value of FDI is insignificant and hence it shows confusion about the decision whether FDI will be a cause to increase the carbon dioxide gas emission or not. These results are suitable for the Asian countries that they should focus on the energy consumption that produce the carbon emission and damaged the environment severely and also put their intension on the growth part of this aspect. This study also provided the insight to the regulation making authorities while formulating policies on environmental condition of the country.   

Keywords: Carbon Dioxide Emissions, Foreign Direct Investment, Economic Development, Energy consumption

JEL Classifications: P18, F63

DOI: https://doi.org/10.32479/ijeep.10218

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