Copula autoregressive (COPAR) modelling of dependence between foreign direct investment and CO2 emissions in Southern Africa
Abstract Environmental concerns have become increasingly important due to their impact on sustainable development. Foreign direct investment (FDI) serves as a key driver of economic growth, but its environmental implications vary. Some investments facilitate technology transfer and cleaner productio...
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| Format: | Article |
| Language: | English |
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Springer
2025-08-01
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| Series: | Discover Environment |
| Subjects: | |
| Online Access: | https://doi.org/10.1007/s44274-025-00316-5 |
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| Summary: | Abstract Environmental concerns have become increasingly important due to their impact on sustainable development. Foreign direct investment (FDI) serves as a key driver of economic growth, but its environmental implications vary. Some investments facilitate technology transfer and cleaner production methods, whereas others contribute to environmental degradation. This study examines the dependence between FDI and carbon dioxide (CO2) emissions in nine Southern African countries from 1990 to 2022, applying a copula-based autoregressive (COPAR) model to capture nonlinear and time-dependent relationships. The findings reveal a weak negative dependence between FDI and CO2 emissions, supporting the "Pollution Halo" hypothesis, which suggests that sustainable FDI fosters cleaner technologies. Energy consumption exhibits a strong positive correlation with CO2 emissions, and economic growth shows a moderate positive association. These results highlight the need for policies that attract sustainable FDI while mitigating environmental risks. Governments should promote green investments, enforce stringent environmental regulations, and support renewable energy initiatives. Regional collaboration is essential for aligning policies and fostering environmentally responsible industrialization, ensuring that FDI contributes to long-term ecological sustainability. |
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| ISSN: | 2731-9431 |