Impact of FDI inflow, crude oil prices, and economic growth on CO2 emission in Tunisia: Symmetric and asymmetric analysis through ARDL and NARDL approach

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This study explores the symmetric and asymmetric impact of real GDP per capita, FDI inflow, and crude oil price on CO2 emission in Tunisia for the 1972–2016 period. Using the cointegration tests, namely ARDL and NARDL bound test, the results show that the variables are associated in a long run relationship. Long run estimates from both approach confirms the validity of ECK hypothesis for Tunisia. Symmetric analysis reveals that economic growth and the price of crude oil adversely affect the environment, in contrast to FDI inflows that reduce CO2 emissions in the long run. Whereas the asymmetric analysis show that increase in crude oil price harm the environment and decrease in crude oil price have positive repercussions on the environment. The causality analysis suggests that a bilateral link exists between economic growth and carbon emissions and a one-way causality ranges from FDI inflows and crude oil prices to carbon emissions. Thus, some policy recommendations have been formulated to help Tunisia reduce carbon emissions and support economic development.

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    • Figure 1. Plots of CUSUM and CUSUMSQ tests
    • Figure 2. NARDL dynamic multiplier effect graphs
    • Figure A1. Plots of CUSUM and CUSUMSQ tests (NARDL model)
    • Table 1. Unit root test
    • Table 2. F-Bound test for linear cointegration ARDL (1,0,0,3,4)
    • Table 3. Linear ARDL model long-run results
    • Table 4. Linear ARDL model short-run results
    • Table 5. F-Bound test for non-linear cointegration
    • Table 6. NARDL model long-run results
    • Table 7. NARDL model short-run results
    • Table 8. NARDL Wald test
    • Table 9. Causality analysis
    • Table 10. FMOLS and CCR estimates
    • Conceptualization
      Tarek Ghazouani
    • Formal Analysis
      Tarek Ghazouani
    • Investigation
      Tarek Ghazouani
    • Methodology
      Tarek Ghazouani
    • Visualization
      Tarek Ghazouani
    • Writing – original draft
      Tarek Ghazouani
    • Writing – review & editing
      Tarek Ghazouani