Munich Personal RePEc Archive

The Environment, Trade Openness, and Domestic and Foreign Investments

Elmarzougui, Eskandar and Larue, Bruno and Tamini, Lota, D. (2013): The Environment, Trade Openness, and Domestic and Foreign Investments.

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Abstract

This paper aims to study the impact of growth and trade openness on the environment at the regional level. We find support for the environmental Kuznet Curve hypothesis for CO2 emissions in Africa, Asia and OECD countries. We find that the pollution haven hypothesis is supported for CO2 in Africa, the Middle East and North Africa, the former United Socialist Soviet Republic and Eastern Europe, and South America, but not for Asia, for which the pollution halo hypothesis could not be rejected. The pollution haven hypothesis is also supported for SO2 emissions in South America while the pollution halo holds for SO2 emissions in Africa. We show that local investment is contributing significantly to both CO2 and SO2 emission increases in most regions while trade openness matters only in OECD and South America.

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