Nexus between foreign direct investment and ecological footprint in BRICS and Next-11: the moderating role of green innovation
Management of Environmental Quality
ISSN: 1477-7835
Article publication date: 5 December 2023
Issue publication date: 1 May 2024
Abstract
Purpose
The study examines the presence of the pollution haven or pollution halo hypothesis in Brazil, Russia, India, China and South Africa (BRICS) and Next-11 economies. Hence, it empirically tests the direct impact of foreign direct investment (FDI) on the ecological footprint. Further, it explores the moderating role of green innovation on the nexus between FDI and ecological footprint.
Design/methodology/approach
The study uses the Driscoll–Kraay (DK) standard error panel regression technique to examine the long-run elasticities amongst the variables for the group of emerging countries, BRICS and Next-11, during the period of 1992 to 2018. Further, statistical robustness is demonstrated using the fully modified ordinary least squares technique.
Findings
The empirical finding shows that FDI degrades environmental quality by raising the ecological footprint. Thus, it proves that FDI is a source of pollution haven in BRICS and Next-11 countries. However, green innovation negatively moderates the relationship between FDI and ecological footprint. That means the joint impact of green innovation, and FDI proves the presence of the pollution halo hypothesis. Further, renewable energy consumption is reducing the ecological footprint, but economic growth and industrialisation are worsening the environmental quality.
Practical implications
This study offers policy implications for governments and policymakers to promote environmental sustainability by improving green innovation and allowing FDI that encourages clean and advanced technology.
Originality/value
No prior studies examine the moderating role of green innovation on the relationship between FDI and ecological footprint in the context of emerging countries.
Keywords
Acknowledgements
The authors wish to thank the editors and anonymous reviewers for providing valuable suggestions. Further, the authors wish to acknowledge the National Institute of Technology Karnataka, Surathkal, India, for supporting the research.
Citation
Padhan, L. and Bhat, S. (2024), "Nexus between foreign direct investment and ecological footprint in BRICS and Next-11: the moderating role of green innovation", Management of Environmental Quality, Vol. 35 No. 4, pp. 799-817. https://doi.org/10.1108/MEQ-07-2023-0204
Publisher
:Emerald Publishing Limited
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