Izvorni znanstveni članak
https://doi.org/10.17535/crorr.2027.0006
The impact of economic growth, foreign direct investment, and trade openness on environmental quality in Africa: The moderating role of institutional quality
Ishiaka Adamu
; Faculty of Economics and Business, Universitas Islam Internasional Indonesia (UIII), Depok, Indonesia
*
Sirajuddin Arabzada
; Faculty of Economics and Business, Universitas Islam Internasional Indonesia (UIII), Depok, Indonesia
Fajar Hirawan
; Faculty of Economics and Business, Universitas Islam Internasional Indonesia (UIII), Depok, Indonesia
* Dopisni autor.
Sažetak
This research examines the impact of economic growth, foreign direct investment, and trade openness on environmental quality in Africa. Moreover, the study considers the moderating role of institutional quality in this relationship. The study employs a two-step system GMM estimator for a dataset of 946 observations from 43 African countries over the period 2002 to 2023. The results show a positive relationship between foreign direct investment, trade openness, economic growth, and CO$_2$ emissions, suggesting that expanding economic activities increase environmental pressure. The relationship between economic growth and CO$_2$ emissions is nonlinear and follows an inverted U-shaped pattern. Furthermore, the results show that strong institutions can mitigate these effects by reducing the environmental impact of economic growth, foreign direct investment, and trade openness. This study contributes to the literature of environmental quality by jointly examining the effects of economic growth, foreign direct investment, and trade openness, which have received limited empirical attention in the Africa-wide panel studies. It further enriches the literature by investigating the moderating role of institutional quality in the relationship between these macroeconomic variables and environmental quality. Our study provides valuable insights for policymakers, regulators, and stakeholders by demonstrating how strong institutions can offset the environmental challenges associated with economic expansion and globalization.
Ključne riječi
Africa; CO2 emissions; dynamic panel GMM estimator; Environmental Kuznets Curve
Hrčak ID:
351145
URI
Datum izdavanja:
21.9.2026.
Posjeta: 0 *