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The aim of this study is to investigate the existence of pollution haven hypothesis (PHH) and test the casual relationship between inward foreign direct investment (FDI) and environmental pollutions, as well as other potential influencing factors of environmental performance. To this end, a panel vector error correction model (VECM) and panel co-integration test is conducted for two country groups - the BRICS (i.e., Brazil, Russia, India, China, and South Africa) and the MINT (i.e., Mexico, Indonesia, Nigeria, and Turkey) - during 1982–2014. Empirical results illustrate a bidirectional and positive causality between FDI inflows and GDP per capita for both groups, implying a virtuous circle of FDI-growth nexus. More importantly, both the BRICS and MINT countries illustrate bidirectional and negative causality between FDI inflows and environmental pressures (i.e., per capita energy consumption for BRICS and per capita carbon emissions for MINT). Such findings indicate the pollution haven hypothesis does not stand in this case. In addition, it is also found that the opening degree of trade can be promoted by FDI inflows, which has rarely been deeply analyzed in prior studies. Concluding remarks and policy suggestions are proposed in the last section. Image 1 • Vector error correction model are employed in this study. • A comparative analysis of BRICS and MINT countries. • Results refute the pollution haven hypothesis. • A virtuous circle exist between FDI and economic growth. • Trade openness can be promoted by FDI inflows. [ABSTRACT FROM AUTHOR]

Previous studies have considered the effect of financial development on carbon emissions; however, few studies have explored the role of green finance in carbon mitigation. To bridge this gap, the current study constructs a green finance development index based on four indicators: green credit, green securities, green insurance, and green investment. A vector error correction model is used to analyze relationships between the development level of green finance, non-fossil energy consumption, and carbon intensity using data from 2000 to 2018. We find that China's green finance industry developed rapidly, and improvements in the green finance development index, as well as the increasing use of non-fossil energy, contributed to a reduction in carbon intensity. Simultaneously, an increase in carbon intensity inhibited the expansion of non-fossil energy use, impeded the investment flow to green projects, and ultimately led to a deterioration of green finance development. In addition, non-fossil energy consumption in China was primarily influenced by green finance and carbon intensity, with clear policy-driven effects. However, the impacts of green finance policies continually fell short and lacked continuity. This study proposes ways in which to improve the effect of green finance policy implementation, expand the consumption of non-fossil energy, and develop a carbon trading market. • The green finance–new energy use–carbon intensity nexus is explored for China. • A vector error correction model is employed. • A green finance development index is constructed based on four green indicators. • Green finance and new energy use are found to reduce carbon intensity. • Carbon intensity increases are found to inhibit green finance and new energy use. [ABSTRACT FROM AUTHOR]