Trade and FDI thresholds of CO_2 emissions for a Green economy in sub-Saharan Africa

摘要

Purpose - This study aims to focus on assessing how improving openness influences carbon dioxide (CO_2)emissions in sub-Saharan Africa (SSA).Design/methodology/approach - This study focusses on 49 countries in SSA for the period 2000-2018divided into: 44 countries in SSA for the period 2000-2012; and 49 countries for the period 2006-2018.Openness is measured in terms of trade and foreign direct investment (FDI) inflows. The empirical evidence isbased on the generalised method ofmoments.Findings - The following main findings are established. First, enhancing trade openness has a net positiveimpact on CO_2 emissions, while increasing FDI has a net negative impact. Second, the relationship between CO_2emissions and trade is a Kuznets shape, while the nexus between CO_2 emissions and FDI inflows is a U-shape.Third, a minimum trade openness (imports plus exports) threshold of 100 ( of gross domestic product (GDP))and 200 ( of GDP) is beneficial in promoting a green economy for the first and second samples, respectively.Fourth, FDI is beneficial for the green economy below criticalmasses of 28.571 of net FDI inflows (of GDP) and33.333 of net FDI inflows ( of GDP) for first and second samples, respectively. It follows from findings thatwhile FDI can be effectively managed to reduce CO_2 emissions, this may not be the case with trade opennessbecause the corresponding thresholds for trade openness are closer to themaximumlimit.Originality/value - This study complements the extant literature by providing critical masses of tradeand FDI that are relevant in promoting the green economy in SSA.