Abstract:
The goal of this paper to determine whether the effect of foreign direct investment inflows on the environment is pollutive or pollution-reducing for BRICS countries-Brazil, Russia, India, China, and South Africa-using annual data for the period 1982-2014. For that purpose, this study examines the long-run impact of FDI inflow and energy use on ecological footprint and its components-crop land, grazing land, forest land, fishing ground, built-up land, and carbon footprint-by introducing and utilizing the bootstrap autoregressive distributed lag model with a Fourier function (FARDL) for cointegration. The findings demonstrate that although the effect of FDI inflows on the footprints is mixed in Brazil and Russia, it is positive on environmental degradation regarding ecological footprint and carbon footprint in India. Furthermore, it is found that FDI inflows increase environmental quality in China for cropland and grazing land footprints and in South Africa for crop land, grazing land, fishing ground, and built-up footprints. Furthermore, the long-run effect of energy consumption is mostly pollutive for BRICS countries.
