Does green innovation moderate between FDI and environmental sustainability? Empirical evidence from South Asia
- PMID: 37943855
- PMCID: PMC10635563
- DOI: 10.1371/journal.pone.0288532
Does green innovation moderate between FDI and environmental sustainability? Empirical evidence from South Asia
Abstract
The study aims to investigate how foreign direct investment (FDI) and green innovation (GI) impact environmental quality in South Asia. Moreover, this study examines the moderating role of GI between FDI and environmental sustainability. We use panel data from 1995 to 2018 for five South Asian nations namely, Pakistan, India, Bangladesh, Sri Lanka, and Nepal. For the empirical analysis, we used 1st generation cointegration like Pedroni and Kao, and 2nd generation cointegration tests like Westerlund. Moreover, for the long-run relationship, we employ fully modified least squares (FMOLS) and dynamic ordinary least squares (DOLS) estimation. The study's empirical results suggest that GI significantly enhances ecological sustainability in South Asian economies; however, FDI degrades the environmental quality. Furthermore, the results suggest that GI significantly moderates the nexus of FDI and ecological sustainability in South Asia. It is recommended that South Asian countries increase green innovation with FDI so that environmental quality can be assured for the region's sustainable development.
Copyright: © 2023 Brohi, Suzuki. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Conflict of interest statement
The authors have declared that no competing interests exist.
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