DOES TRADE LIBERALIZATION AND FOREIGN DIRECT INVESTMENT INDUCEENVIRONMENTAL DEGRADATION IN SELECTED WEST AFRICAN SUB-REGIONS?

Abstract

This study examined the ef ect of trade liberalization and foreign direct investment onenvironmental degradation within the selected West African sub-region. The data employedinanalyzing the result covers the period 1996 to 2022. Fully modified ordinary least squares anddynamic ordinary least squares were employed in estimating the models. The study's findingsindicate a negative and insignificant influence of trade liberalization and foreigndirectinvestment on environmental degradation, indicating that trade liberalization and foreigndirectinvestment reduced environmental degradation. Again, the interaction of trade liberalizationandforeign direct investment reduced environmental degradation. Other results confirmed that fossilfuel energy consumption positively enhanced environmental degradation, although renewableenergy consumption significantly reduced pollution. Based on the empirical findings, sincetradeliberalization and foreign direct investment reduce environmental degradation as fossil fuelenergy consumption increase environmental degradation, implies that ECOWAS governmentsinstitute environmental laws following the race to the top theory to discourage fossil fuel energyusage and push for more renewable energy as it reduces incessant pollution within the region