Revisiting the Link between Foreign Direct Investment and Industrialization on Environmental Quality in Pakistan: Empirical Investigation by Using NARDL

Abstract

The main objective is to investigate the short-term and lasting non-linear effects of foreign direct investment and industrialization in Pakistan on environmental degradation. The nonlinear autoregressive lag method has been used to analyze the short and long run relationship. Overseas direct funding and Industrialization are split into superb and poor options to find out non-linear dating with CO2. In long run, an increase in foreign direct investment will have a significant impact on CO2 emissions, but a decrease in foreign direct investment will have a negative and small impact. The development of industrialization had a significant impact on CO2 emissions, although the decline of industrialization had a negative and small effect. The government should issue environmental regulations for industrial zones. Innovative administrative and business premises in the workplace are essential to control the pollution caused by imaginative innovation. Foreign financial investors must adopt guidelines and restrictions to search for harmless ecosystems.