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Nonlinear impact of institutional quality and FDI on green GDP in OIC countries

Abdulkadir, Sumia Faisal and Lacheheb, Zakaria (2022) Nonlinear impact of institutional quality and FDI on green GDP in OIC countries. In: 2nd International Conference on Business, Social Sciences, Economics and Technology 2022, Kuala Lumpur, Malaysia.

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Our study investigates the linear and nonlinear effect of foreign direct investment and institutional quality on green GDP using a variety of macroeconomic variables, focusing on OIC countries. Using the System GMM (SYS-GMM) estimator, we examine the impact of foreign direct investment, institutional quality, investment, trade openness, and population on green GDP from 2007 to 2016. According to the study's empirical findings, institutional quality is significant and has a positive relationship with green GDP. Additionally, we discovered that trade openness and investment have a considerable negative impact on green GDP, although foreign direct investment had no significant relationship with green GDP. Our research indicates that a 1% increase in institutional quality results in a 0.0515% increase in green GDP. Consequently, a 1% increase in trade openness and investment reduces green GDP by 0.0968% and 0.0507%, respectively. Regardless of the linear nexus, the expected data visualization indicates an existing U-shaped relationship between institutional quality and green GDP, also, the results confirm the link as a higher level of institutional quality positively contribute to green GDP in OIC countries. Despite the fact that foreign direct investment contributed negligibly to the green GDP, in order to prevent environmental pollution, the governments of the OIC countries should prioritize maintaining and enhancing the quality of their institutions in order to increase and promote green GDP.

Item Type: Conference or Workshop Item (Slide Presentation)
Uncontrolled Keywords: FDI, Institution Quality, Green GDP, OIC, GMM
Subjects: H Social Sciences > HB Economic Theory
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button): Kulliyyah of Economics and Management Sciences
Depositing User: Mr ZAKARIA LACHEHEB
Date Deposited: 15 Feb 2023 11:23
Last Modified: 15 Feb 2023 11:23
URI: http://irep.iium.edu.my/id/eprint/102088

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