Sustainable Development in Asian Countries: Exploring the Nexus between Economic Growth and Environmental Sustainability

Abstract

Abstract The current study aims to contribute to improving the environmental conditions of Asian countries by focusing on specific factors, namely, foreign direct investment (FDI), energy use, trade openness, GDP per capita, economic growth, and CO2 emissions, as well as their roles in environmental sustainability. The study utilizes the Levin, Lin & Chu t Unit Root Test (LPT), autoregressive distributed lag (ARDL), and cross-sectional ARDL estimators with cross-country data from five Asian host countries from 1985 to 2020. The study's empirical results indicate that several factors, including energy use, FDI inflows, trade openness, and GDP per capita, influence CO2 emissions per capita and play significant roles in promoting environmental sustainability in Asian countries. The study suggested that formulating effective policies to optimize energy utilization, promote the use of clean and renewable energy sources, and adopt advanced energy technologies are essential steps toward improving environmental conditions in Asian countries. Encouraging foreign investors to invest in these countries can also positively impact the economy and lead to increased economic growth. Economic growth is influenced by factors such as FDI inflows, trade openness, and energy use, which in turn affect CO2 emissions and contribute to the overall environmental sustainability of both host and source countries. In summary, the study highlights the importance of implementing sustainable energy practices and attracting foreign investments to drive economic growth while simultaneously working toward environmental sustainability in Asia. By understanding the relationships between these factors, policymakers can make informed decisions and develop effective strategies to create a more environmentally friendly and prosperous future for the region.