A new look at the FDI–income–energy–environment nexus: Dynamic panel data analysis of ASEAN

The main focus of this paper is to estimate the effects of foreign direct investment (FDI) inflows, income and energy consumption on CO2 emissions using panel data of five ASEAN countries over 1981–2010. The results based on the pooled mean group (PMG) estimator of dynamic panels show that FDI tends to increase CO2 emissions, supporting evidence of the pollution haven hypothesis. We also find that income and energy consumption have a detrimental impact on reducing CO2 emissions. •This study examines the FDI–income–energy–environment nexus.•The pooled mean group (PMG) estimator is applied to panel data of 5 ASEAN countries.•FDI deteriorates the environment, supporting the pollution haven hypothesis.•Growth and energy consumption have a detrimental effect on the environment.