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E. N. Udemba
interaction between economic growth and environment performance. They hypothesized that even though the economic growth will cause environmental dilapidation,
the scenario will eventually change to the betterment of the environment. This they
argued based on the awareness and increased sensitivity of people at the later stage
of the economic growth on the importance of maintaining good quality of environment. For the effectiveness of this study based on EKC, squared GDP per capita is
employed to monitor the economic growth pattern. Pollution haven hypothesis hence
taken as PHH is among the hypothetical backgrounds of this study. This hypothesis
is based on the implication of FDI and the activities of foreign investors on the
environmental performance of the host country. There have been diverse views on
this hypothesis, with some scholars [12, 18, 37, 39] for India and Turkey, and [13,
34, 35] favoring the negative implication of FDI on the environment quality, while
others [1, 4, 8, 23, 38, 44] for Indonesia) are favoring the positivity of FDI on the
both economy and environment. The negative influence of FDI is perceived when
the activities of the foreign investors induce environment dilapidation through dirty
practice of production with fossil fuel energy sources. However, the positive impact
of FDI is perceived when the foreign investors are impacting favorable to the growth
of economy through spillover or leakage effects such as employment expansion,
technical and skill transfer and economics of scale, and equally impacting the environment quality through improved technology and innovation that enhances clean
production void of pollution. Pollution haven hypothesis (PHH) is valid when FDI
is impacting unfavorable on the environment, and not valid when FDI is favorable
and this is called pollution halo hypothesis (PHH). When investment in a country
introduced a dirty production with high utilization of fossil fuels that violates environmental regulations it supports pollution haven hypothesis (PHH). Contrary to the
negative impact of foreign investment, pollution halo hypothesis is established if the
positive impact of foreign direct investment such as technical transfer, job creation,
and economics of skill outweighs its negative impact.
3 Data, Methodology, and Modeling
Pakistan country-specific data from 1970 to 2018 was applied to this research for
clear insight both in short- and long-run investigation. The data was made up of
different variables sourced from different source. Per capita ecological footprint,
per capita GDP (constant 2010 US$), squared per capita GDP (constant 2010 US$),
agriculture (agriculture, forestry, and fishing value added constant 2010 US$), foreign
direct investment (% of GDP), energy use (million tonnes oil equivalent). Apart
from ecological footprint and energy use that were garnered from Global Network
of Footprint [26] and British Petroleum (BP) statistical review [32], respectively, all
other variables were sourced from World Development Index (WDI) [41].
Methodologies applied in this study are descriptive statistics for ascertaining the
normality of the data distribution, test of stationarity for tracing of the pattern of
the data and order of integration of the variables. ARDL-bound testing was equally
E. N. Udemba
interaction between economic growth and environment performance. They hypothesized that even though the economic growth will cause environmental dilapidation,
the scenario will eventually change to the betterment of the environment. This they
argued based on the awareness and increased sensitivity of people at the later stage
of the economic growth on the importance of maintaining good quality of environment. For the effectiveness of this study based on EKC, squared GDP per capita is
employed to monitor the economic growth pattern. Pollution haven hypothesis hence
taken as PHH is among the hypothetical backgrounds of this study. This hypothesis
is based on the implication of FDI and the activities of foreign investors on the
environmental performance of the host country. There have been diverse views on
this hypothesis, with some scholars [12, 18, 37, 39] for India and Turkey, and [13,
34, 35] favoring the negative implication of FDI on the environment quality, while
others [1, 4, 8, 23, 38, 44] for Indonesia) are favoring the positivity of FDI on the
both economy and environment. The negative influence of FDI is perceived when
the activities of the foreign investors induce environment dilapidation through dirty
practice of production with fossil fuel energy sources. However, the positive impact
of FDI is perceived when the foreign investors are impacting favorable to the growth
of economy through spillover or leakage effects such as employment expansion,
technical and skill transfer and economics of scale, and equally impacting the environment quality through improved technology and innovation that enhances clean
production void of pollution. Pollution haven hypothesis (PHH) is valid when FDI
is impacting unfavorable on the environment, and not valid when FDI is favorable
and this is called pollution halo hypothesis (PHH). When investment in a country
introduced a dirty production with high utilization of fossil fuels that violates environmental regulations it supports pollution haven hypothesis (PHH). Contrary to the
negative impact of foreign investment, pollution halo hypothesis is established if the
positive impact of foreign direct investment such as technical transfer, job creation,
and economics of skill outweighs its negative impact.
3 Data, Methodology, and Modeling
Pakistan country-specific data from 1970 to 2018 was applied to this research for
clear insight both in short- and long-run investigation. The data was made up of
different variables sourced from different source. Per capita ecological footprint,
per capita GDP (constant 2010 US$), squared per capita GDP (constant 2010 US$),
agriculture (agriculture, forestry, and fishing value added constant 2010 US$), foreign
direct investment (% of GDP), energy use (million tonnes oil equivalent). Apart
from ecological footprint and energy use that were garnered from Global Network
of Footprint [26] and British Petroleum (BP) statistical review [32], respectively, all
other variables were sourced from World Development Index (WDI) [41].
Methodologies applied in this study are descriptive statistics for ascertaining the
normality of the data distribution, test of stationarity for tracing of the pattern of
the data and order of integration of the variables. ARDL-bound testing was equally