FDI, GDP, and CO2 Emission: ARDL Bound Cointegration Relationship Examination
A.Muthusamy1, P. Jansi Rani2
1Dr. A. Muthusamy, Professor, Department of International Business, Alagappa University, Karaikudi (Tamil Nadu), India.
2P. Jansi Rani, Ph.D Research Scholar, Department of Commerce, Alagappa University, Karaikudi (Tamil Nadu), India.
Manuscript received on 17 September 2019 | Revised Manuscript received on 04 October 2019 | Manuscript Published on 11 October 2019 | PP: 132-138 | Volume-8 Issue-2S10 September 2019 | Retrieval Number: B10220982S1019/2019©BEIESP | DOI: 10.35940/ijrte.B1022.0982S1019
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The study tries to evaluate empirically, the relationship between foreign direct investment (FDI) and environmental impact with GDP in India using annual data over the period 1980-1981 to 2017-18. The genuine effect on the earth, in any case, might be bigger because CO2 emission is one of the numerous contaminations produced by financial exercises. In any case, CO2 is a worldwide air toxin, our finding has some broad ramifications for the worldwide condition too, with India has risen as the fourth most noteworthy in the worldwide positioning of CO2 emissions by the turn of this century. The Autoregressive Distributed Lag (ARDL) Bound Test after which the cointegration and causality tests were analyzed. The error correction models were also predictable to scrutinize the short-run dynamics. The Granger causality test finally deep-rooted the presence of unidirectional causality which long runs from GDP and CO2 to foreign direct investment. The error correction estimates confirmed that the Error-Correction Term is statistically significant and has a negative sign, which confirms that there isn’t any problem in the long-run equilibrium relationship between the independent (GDP & CO2 ) and dependent variables (FDI). The study concluded that FDI had a long-run relationship with GDP and CO2 emission.
Keywords: Foreign Direct Investment, Gross Domestic Product, CO2 Emission, Indian Economy, ARDL Cointegration Analysis, etc.
Scope of the Article: e-governance, e-Commerce, e-business, e-Learning