Does technology innovation matter for environmental pollution? Testing the pollution halo/haven hypothesis for Asian countries

Abstract

China’s GDP grew 9% annually during the end of the twentieth century. This economic growth degrades China’s ecology, making it the world’s greatest polluter. This position forced China to invest in developing nations and to take advantage of low-cost labor and increased pollution quotas from the World Trade Organization (WTO) to meet sustainable development objectives without environmental harm. The significance of this study is, first, this study examines the influence of Chinese outward foreign direct investment, gross domestic product, trade openness, technological innovation, and energy consumption on carbon emissions in Asian countries (Turkey, Pakistan, the Philippines, Singapore, India, Indonesia, and Cambodia). Secondly, the panel autoregressive distributed lag cointegration (ARDL) technique was used on data from 2000 to 2020 to investigate the pollution halo/haven hypothesis and environmental Kuznets curve hypothesis for south Asian nations. This analysis demonstrated that Chinese outbound foreign direct investment increases carbon emissions and confirms the pollution halo concept. Except for India and Pakistan, these nations show a U-shaped link between Chinese foreign direct investment and carbon emissions. So, policy implications recommended by the results of this study are foreign direct investment inflows with modern and ecofriendly technological transfer and enhancement in labor, and conservational management practices will benefit emerging countries to attain their sustainable development goals.