The FDI-CO<sub>2</sub>nexus from the sustainable development perspective: the case of Azerbaijan

Mukhtarov S., Aliyev S., Mikayilov J., Ismayilov A., Rzayev A.

INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY, vol.28, no.3, pp.246-254, 2021 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 28 Issue: 3
  • Publication Date: 2021
  • Doi Number: 10.1080/13504509.2020.1804479
  • Journal Name: INTERNATIONAL JOURNAL OF SUSTAINABLE DEVELOPMENT AND WORLD ECOLOGY
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier, IBZ Online, PASCAL, BIOSIS, CAB Abstracts, Environment Index, Geobase, Greenfile, Index Islamicus, Public Affairs Index, Veterinary Science Database
  • Page Numbers: pp.246-254
  • Azerbaijan State University of Economics (UNEC) Affiliated: Yes

Abstract

The current study explores the effect of Foreign Direct Investment (FDI) on CO(2)emissions in Azerbaijan utilizing time series data spanning from 1996 to 2013. The structural time series modeling (STSM) approach is employed in empirical estimations. The STSM framework allows parameters to evolve over time. Estimation results show that the coefficients of FDI and income are time-varying. The impact of FDI is positive before 2006 and negative after that year, while the income elasticity is positive for the entire period. The estimated income elasticity allows to conclude that the EKC phenomenon does not hold for the case of Azerbaijan. The different effects of FDI on CO(2)emissions, possible explanations and related policy implications are discussed.