Foreign Direct Investment, Institutional Quality, and Environmental Pollution in Selected African Countries
DOI:
https://doi.org/10.54536/ajee.v3i1.3939Keywords:
Africa, Environment, FDI, PCSE, PHH, PollutionAbstract
African countries increasingly attract foreign direct investment as they strive for economic growth and development. However, there have been concerns over the rising effects of FDI on pollution. These concerns are rooted in the potential for industrial activities associated with FDI to have adverse environmental impacts. Hence, the needs to tackle the problem of pollution cannot be overemphasized. One way to do this is by strengthening the quality of African institutions. This study was conducted to examine the effects of institutional quality and FDI on environmental pollution in selected African countries. Environmental pollution was measured using CO2 emission.The result of the PCSE estimator showed that institutional quality had negative effects on environmental pollution, but the effect of FDI was positive and insignificant. Also, the effect of moderating effect showed that institutional quality has the potential to reduce the positive effect of FDI on environmental pollution. It was recommended that African governments should strengthen the quality of their institutions by strengthening environmental governance frameworks.
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