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VOL. 8, ISSUE 1 (2026)
Economic growth, renewable energy consumption, and FDI on greenhouse gas emissions in South Asia: Evidence from the pollution haven hypothesis
Authors
A I S Perera
Abstract
The rapid growth of foreign direct investment
has corresponded with a gradual rise in greenhouse gas emissions across South
Asia, prompting concerns about the environmental consequences of cross-border
capital flows. Thus, this study investigates the long- and short-term effects
of economic growth, renewable energy consumption, and foreign direct investment
(FDI) on greenhouse gas (GHG) emissions in South Asia, with an emphasis on the
Pollution Haven Hypothesis (PHH). The analysis uses annual panel data of Bangladesh,
India, Pakistan, and Sri Lanka from 1972 to 2022, as well as panel unit root
tests, panel cointegration techniques, and panel autoregressive distributed lag
(ARDL) models, which include pooled mean group (PMG), mean group (MG), and
dynamic fixed effects (DFE) estimators. The positive and statistically
significant effect of FDI on emissions provides significant empirical evidence
to the Pollution Haven Hypothesis, which states that South Asian countries
attract pollution-intensive foreign direct investment due to weaker
restrictions on pollution. These findings emphasize the ecological risks of
unregulated FDI inflows, emphasizing the significance of incorporating
environmental safeguards into investment and energy policies to achieve
sustainable development in South Asia.
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Pages:32-39
How to cite this article:
A I S Perera "Economic growth, renewable energy consumption, and FDI on greenhouse gas emissions in South Asia: Evidence from the pollution haven hypothesis". International Journal of Environmental and Ecology Research, Vol 8, Issue 1, 2026, Pages 32-39
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