Impact of Foreign Direct Investment, Tourism and Industrialization on Ecological Footprints in Southeast Asian Countries

Abstract

This study examines the impact of foreign direct investment, tourism and industrialization on environmental degradation in Southeast Asian countries. For this purpose, a panel data from 1995-2020 is used for seven countries: Cambodia, Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam. A fixed effect model is applied and results indicate that increasing tourism and industrialization raise ecological footprints and thus deteriorate the environment. Foreign direct investment (FDI) has a negative and significant effect on ecological footprints and helps to improve environmental sustainability. Further, the present study uses GDP per capita and results indicate that increasing income exacerbates the environment. Thus, this study recommends that these countries should attract more FDI to decrease ecological footprints.