Does Foreign Direct Investment Increase Ecological Footprint? An Analysis of Countries Attracting the High Foreign Direct Investment
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Foreign Direct Investments, Ecological footprint, Panel ARDLAbstract
This study aimed to investigate the impact of foreign direct investments on the ecological footprint. For this purpose, data for the period 1990-2021 of the 19 countries that attracting the high Foreign Direct Investment (FDI) were used. In order to determine the short and long-term effects on the FDI-ecological footprint relationship, the Panel Lag Distributed Autoregressive Model (Panel ARDL) was analyzed using the Pooled Mean Group (PMG) estimator. The analysis findings show that FDI have a positive effect on the ecological footprint. The fact that FDI increases the ecological footprint in the selected group of countries means that these countries are subject to environmental degradation and pollution by FDI. In addition, while economic growth, one of the explanatory variables used in the model, has a positive relationship with the ecological footprint, renewable energy has a negative relationship. As a result of the study, various policy recommendations were made to host countries to reduce the ecological footprint caused by FDI.
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