Foreign Direct Investment, Industrial Value Added, Trade Liberalization and Environmental Degradation in South Asian Countries

Abstract

To explore the impact of industrial value added, Foreign direct investment, population growth and Trade openness on Environment in Pakistan, India, Bangladesh, Nepal, Sri Lanka and Bhutan is the aim of this study. This study used the data of Pakistan, India, Bangladesh, Nepal, Sri Lanka and Bhutan from year 1990 to 2021 getting from World Development Indicators. Panel Autoregressive Distributed Lag model was conducted for south Asian countries as a panel. We have found that industry value added and CO2 have a negative relation with each other in the empirical section.  It is found that the positive correlation between Foreign direct investment and CO2 conclude that FDI is harmful for the environment, trade has negative correlation with the environment. The study found that the population growth has positive impact and renewable energy consumption has positive relation with CO2. This study suggests that trade liberalization measures have been pursued by promoting financial increase in south Asian countries but they have few potentially unfavorable environmental consequences. The findings are advised that the human behaviors could create consciousness in peoples to shield environment in south Asian regions.