Impact of FDI, industrialization, and education on the environment in Argentina: ARDL approach

Abstract

PurposeThis study employed the stochastic implications of regression on population, affluence, and technology (STIRPAT) methodology between 1972 and 2021. The main goal of this research is to look at how FDI, population growth, industrialization, and education affect the environment in Argentina. MethodologyThe F-bound test and Johansen cointegration test are employed in this research to determine if there is a co-integration association among the variables. Additionally, the Autoregressive Distributed Lag (ARDL) method is used to examine the short-run and long-run elasticity of the independent variable. This study also incorporated a pairwise Granger causality test to determine the direction of causation between the variables. After that, the study applied several diagnostic and stability tests. FindingsThe empirical evidence demonstrates the presence of a co-integration association among CO2 emissions, population, industrialization, and education. The findings indicate that population growth and industrialization harm the environment in Argentina in the long run. In addition, a significant inverse association was obtained between CO2 emissions and educational expenditures in the short run. Practical implicationsThe existence of STIRPAT suggests that Argentina is capable of achieving sustained economic growth. To achieve the goal, countries must implement appropriate government policies and ensure their implementation. This paper argues strongly for more investment in education, renewable energy, sustainable industrialization, and research and development, all of which are essential for a green economy.