Abstract:
This study assessed how clean technology and policy for environmental
sustainability mediate the link between between FDI and environmental
quality in West Africa. The study used macroeconomic data from 2005 to
2020 from all the West African countries based on available data. The
Generalised Method of Moments was used as estimation technique for the
study. The findings of the study revealed that foreign direct investment (FDI)
enhances environmental quality lending credence to the pollution halo
hypothesis in West Africa. Again, the result indicated that both clean
technology and environmental policy enhance environmental quality in West
Africa. Finally, the net effect calculation provides evidence for the last
hypothesis that only environmental policy mediates the link between FDI and
environmental quality in West Africa. Thus, while FDI improves
environmental quality in West Africa, the effect is more prominent in the
presence of environmental policies. The study suggest that environmental
policy is necessary when it comes to environmental quality, and as a matter of
fact, various West African governments through their environmental
protection agencies should institute and implement environmental
policies focusing on environmental protection. This policy should aim to
direct the activities of corporations receiving foreign direct investment (FDI)
towards environmental concerns. Additionally, policymakers and governments
should step up efforts to attract FDI to West Africa, while also enforcing
environmental regulations in multinational corporations' operations.
