The influence of key economic globalization factors on economic growth and environmental quality: An empirical study in Southeast Asian countries

Abstract

This study examines the important manifestations of economic globalization, such as increased international trade, inward foreign direct investment (FDI), and air passenger transport (PAX) on economic growth and environmental quality in Southeast Asian countries. The results of data analysis for the period 1990–2019 using the panel autoregressive distributed lag model (ARDL) have confirmed the long run impact of these factors on economic growth and environmental quality (the reduction of CO2 emissions into the environment per unit of production) in Southeast Asia. Furthermore, international trade and PAX positively affect economic growth in both groups of lower-middle-income countries and upper-middle and high-income countries. Inward FDI, however, only has a positive effect on economic growth for the group of lower-middle-income in the short run. In the long run, it has a negative impact. On the other hand, when the manifestations of economic globalization increase, they lead to an increase in CO2 emissions, but there is a decrease in this ratio per unit of production in the long run and in most countries in the short run. These findings are the basis for making economic growth and environmental quality improvements in different regions and countries of Southeast Asia.