Effect of economic growth, FDI inflows, trade openness, environment related technologies, and environment related revenues taxes on CO2 emission with pooled mean group (PMG) panel ARDL

Abstract The current research study employed PMG (Pooled Mean Group) estimator to examine the impact of foreign direct investment inflows (FDI Inflows), Trade Openness (TO), environmental-related technologies (ERTs), environmental-related tax revenues (ERTRs), and Economic growth (EG) on carbon dioxide (CO2) emission with a dataset of 36 OECD countries spanning from 1990 to 2020. Kao and Pedroni cointegration test results show that study variables are stationary at I(0) and I(I) that conform pooled mean group (PMG) panel ARDL method can be employed. Empirical results of PMG demonstrate that environmental-related tax revenues (ERTRs) help reduce CO2 emission while foreign direct investment inflows (FDI Inflows), Trade Openness (TO), environmental-related technologies (ERTs) and Economic growth (EG) are significantly and positively related to environmental degradation. In context of study findings several relevant financial globalization policies are suggested.