An Empirical Investigation between FDI, Tourism, and Trade on CO₂ Emission in Asia: Testing Environmental Kuznet Curve and Pollution Haven Hypothesis

This study aims to analyze the influence of foreign direct investment (FDI), tourism, exports, and imports on carbon dioxide (CO₂) emissions in the High-Income State, Upper-Middle Income, and Lower-Middle-Middle Income in Asia during the period of 2010-2019. This study uses the Poisson Pseudo-Maximum Likelihood method. The results of this study indicate that Environmental Kuznets Curve Hypothesis is valid in the country of High Income and Upper-Middle Income. In addition, there is a non-linear relationship between FDI, tourism, Export, and imports on carbon dioxide (CO₂) emissions. The interaction variables, which are a FDI with tourism and FDI with Export. Each of them is reducing carbon dioxide emissions only in high-income countries. Meanwhile, the interaction variables between FDI and imports reduce carbon dioxide emissions in high-income countries. However, it increases the carbon dioxide emissions in the upper-middle-income country.