Caring for the environment: measuring the dynamic impact of remittances and FDI on CO2 emissions in China

Various old nexuses are getting new empirical attention in advanced econometric. Therefore, we examine the asymmetric influence of remittances and FDI on CO2 emissions by using the NARDL approach for China from 1981 to 2019. Based on NARDL empirical findings, a negative change in remittances has also positive effects on CO2 emissions in the short and long run. We found that positive and negative change in FDI has also a positive effect on CO2 emissions, while a positive change in FDI is relatively more effective on CO2 emissions than a negative change in FDI in long run. Asymmetry is observed in the only magnitude but not in direction. Our study implies that the China government should redesign the environmentally friendly policies and enforces the foreign investors to role play in environmental quality.

Automated summary

The study found that remittances and FDI have asymmetric effects on CO2 emissions in China, with positive changes in FDI having a more lasting impact on emissions.