THE EFFECTS OF FDI AND ECONOMIC GROWTH ON CO2 EMISSIONS IN SADC

Abstract

This study investigates the effects of foreign direct investment (FDI), economic growth, and capital stocks on the CO2 emissions in 16 Southern African Development Community (SADC). The analysis includes panel data from 1990 to 2014. To examine the effect, both statics and dynamics estimation models were used in this research. The results from panel statics using pooled ordinary least square and dynamic panel estimation using system general methods of the moments suggest a positive and significant effect of FDI and economic growth on CO2 emissions in SADC. While in contrast, capital stocks have negative and significant effects on CO2. These results indicate that FDI inflow has been damaging the environment in SADC countries. While when investing in clean energy the CO2 emissions tend to reduce. Hence, these countries should adopt policies that encourage the use of environmentally friendly technology and keep pursuing sustainable development goals while protecting the environment. and on this the on stocks, and CO2 emissions. This uses both static and dynamic panel data models, are using pooled ordinary least square on static panel data. To estimate the dynamic panel data, we use the difference (diff) and system (sys) generalized methods of moments (GMM). Thus, this to use the Cobb Douglas production function approach to estimate the impact of FDI inflows and economic growth on CO2 emissions in countries. with static used the estimation positive significant FDI economic statistically significant on CO2 when invest more in non-polluting advanced tended to