Preprint Article Version 1 This version is not peer-reviewed

Bootstrap ARDL Test on the Relationship among Trade, FDI and CO2 Emissions: Based on the Experience of BRICS Countries

Version 1 : Received: 11 November 2019 / Approved: 12 November 2019 / Online: 12 November 2019 (15:50:57 CET)

How to cite: He, F.; Chang, K.; Li, M.; Li, X.; Li, F. Bootstrap ARDL Test on the Relationship among Trade, FDI and CO2 Emissions: Based on the Experience of BRICS Countries. Preprints 2019, 2019110129 (doi: 10.20944/preprints201911.0129.v1). He, F.; Chang, K.; Li, M.; Li, X.; Li, F. Bootstrap ARDL Test on the Relationship among Trade, FDI and CO2 Emissions: Based on the Experience of BRICS Countries. Preprints 2019, 2019110129 (doi: 10.20944/preprints201911.0129.v1).

Abstract

We used the Bootstrap ARDL method to test the relationship between the export trades, FDI and CO2 emissions of the BRICS countries. We found that China's foreign direct investment and the lag one period of CO2 emissions have a cointegration on exports. South Africa's foreign direct investment and CO2 emissions have a cointegration relationship with the lag one period of exports, and South Africa's the lag one period of exports and foreign direct investment have a cointegration relationship with the lag one period of CO2 emissions. But whether it is China or South Africa, these three variables have no causal relationship in the long-term. Among the variables of other BRICS countries, Russia is the only country showed degenerate case #1 in McNown et al. mentioned in their paper. When we examined short-term causality, we found that CO2 emissions and export trade showed a reverse causal relationship, while FDI and carbon emissions were not so obvious. Export trade has a positive causal relationship with FDI. Those variables are different from different situations and different countries.

Subject Areas

global emission reduction; trade; FDI; BRICS countries; Bootstrap ARDL

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