The relationship between foreign direct investment, economic growth and enviromental pollution: The case of OECD countries

In recent years, with the increase in environmental problems, countries have started to offer solution-oriented policies to these problems in terms of sustainable environment. In this study, the short-term and long-term impact of foreign direct in-vestment, economic growth and energy consumption variables on CO2 emissions in-vestigated for selected OECD countries (Austria, Australia, Belgium, Chile, Colombia, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Republic of Korea, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States) using annual data for the period 1990-2018. LLC Panel Unit Root Test result shows that the series are stationary at different levels. Furthermore, according to the long-term results of the Panel ARDL an increase in for-eign direct investment, economic growth and energy consumption lead to an increase in CO2 emissions. In the short-term, GDP per capita and energy consumption lead to an increase in CO2 emissions. Finally, as a result of the Dumitrescu and Hurlin (2012) Panel Causality Test, bidirectional causality relationship was detected between energy consumption and CO2 emissions; one-way causality relationship was found from for-eign direct investment to CO2 emissions and from foreign direct investment to GDP per capita. Keywords: Enviromental Pollution, Foreign Direct Investment, Economic Growth, Energy Consumption, Selected OECD Countries.