Impact of Environmental Degradation, Energy, and FDI on Growth: Panel Analysis of South Asian Economies

Abstract

Environmental degradation, energy consumption, and FDI exert impetus effects on growth. This study is aimed to explore the impact of environmental degradation, energy, and FDI on growth of South Asia economies. The study has applied one step System Generalized Method of Moment (SGMM) on panel data during the period 2010-2023. Diagnostic tests entail that all the basic assumptions of the Classical Linear Regression Model are satisfied. The result of the Sargon test authenticates that the instruments are good. Findings show the encouraging impact of energy and FDI on growth, whereas, environmental degradation has adverse effect on growth of South Asian economies. The study suggests that South Asian countries should ensure foreign direct investment, increase the usage of advanced technology for energy purposes, as well as, explore the wide-ranging policy implications that would encourage an increase in demand for improved environmental quality which will ultimately, ensure the accelerated economic growth.