1. The asymmetric effects of foreign direct investment on clean energy consumption in BRICS countries: A recently introduced hidden cointegration test.
- Author
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Yilanci, Veli, Ozgur, Onder, and Gorus, Muhammed Sehid
- Subjects
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CLEAN energy investment , *FOREIGN investments , *ENERGY consumption , *CLEAN energy , *COINTEGRATION , *CARBON taxes - Abstract
This study investigates the effects of foreign direct investment and the trade openness on clean energy consumption for BRICS countries―Brazil, Russia, India, China, and South Africa―during the period 1985–2017. For that purpose, the study employs Fourier ADL (Autoregressive Distributed Lag) and hidden Fourier ADL cointegration tests and Fourier Toda-Yamamoto approach to Granger causality considering both raw data and the asymmetric components of the series. Empirical results reveal that these variables are cointegrated in Russia, China, and South Africa regarding hidden Fourier ADL cointegration test while they are cointegrated only in South Africa considering the Fourier ADL test. It is found that trade positively affects clean energy use in South Africa. In the context of negative components, Foreign direct investment has a positive impact on clean energy use in Russia, while its effect is insignificant in China and South Africa. Moreover, trade openness influences clean energy consumption negatively in Russia, China, and South Africa. According to the Fourier Toda-Yamamoto and asymmetric Fourier Toda-Yamamoto causality tests results (regarding negative components), there is unidirectional causality from foreign direct investment inflows to clean energy consumption in China. Findings of this study may provide beneficial information to the policymakers to design proper environmental policies such as the imposition of the carbon tax and subsidy on cleaner energy consumption. Image 100 • Countries need to use clean energy to struggle with greenhouse gases. • This study investigates the effects of FDI inflows on clean energy consumption in BRICS. • Hidden Fourier ADL test is employed to find the long-run relationship between variables. • This study utilizes an asymmetric Fourier Toda-Yamamoto causality test. • The causality tests results provide mixed evidence across BRICS countries. [ABSTRACT FROM AUTHOR]
- Published
- 2019
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