AUTHOR=Ali Arshad 

TITLE=RETRACTED: An empirical analysis of FDI and institutional quality on environmental quality and economic growth, evidence from the panel of asian oil-producing and non-oil-producing economies

JOURNAL=Frontiers in Environmental Science

VOLUME=Volume 10 - 2022

YEAR=2023

URL=https://www.frontiersin.org/journals/environmental-science/articles/10.3389/fenvs.2022.1066221

DOI=10.3389/fenvs.2022.1066221

ISSN=2296-665X

ABSTRACT=This study applies Augmented Mean Group (AMG) estimation techniques to investigate whether institutional quality and foreign direct investment contributed to economic growth and environmental quality in emerging oil-producing and non-oil-producing Asian countries during the period 1975 - 2020. The results of EMG estimation indicate that foreign direct investment, institutional quality, and carbon emissions can contribute significantly to economic growth in the long run. Likewise, trade liberalization, transport infrastructure and urbanization can significantly boost economic growth. Long-term variable elasticity coefficients based on carbon emissions model suggest that FDI can stimulate carbon emissions, thereby validating the Pollution Heaven Hypothesis (PHH) in selected panel of countries. Institutional quality has a significant negative impact on carbon emissions, while GDP, trade openness, urbanization, and investment in transport infrastructure contribute significantly to carbon dioxide emissions. Country wise estimates of the AMG strategy show that the institutional quality of oil-producing countries has no significant impact on economic growth, but does boost economic growth in non-producing countries. The quality of institutions in both non-oil producing and oil-producing countries can significantly reduce carbon emissions. Moreover, foreign direct investment stimulates economic growth in oil-producing countries compared to non-oil-producing countries. However, FDI contributes significantly to both oil-producing and non-oil-producing CO2 emissions, thus validating PHH. Controlling factors such as economic growth increase significantly to CO2 emissions in oil-producing countries, while, CO2 emissions from petro-states stimulate more to economic growth than non-petroleum states. The impact of trade liberalization on economic growth is significantly positive in both oil-producing countries and non-oil-producing countries, but the contribution of non-oil-producing economies is higher than that of oil-producing countries. Compared with non-producing countries, trade liberalization in oil-producing countries contributes more to carbon emissions. Investment in transportation infrastructure significantly boosted economic growth in both oil and non-oil producing countries, but oil producing countries contributed more than non-oil producing countries. A range of policy proposals were discussed to achieve economic and environmental sustainability.