Fumei He

We used the Bootstrap Autoregressive Distributed Lagged Model (ARDL) method to test the relationship among BRICS (Brazil, Russia, India, China, and South Africa) countries’ trade, foreign direct investment (FDI), and CO₂ emissions. We found that Brazil’s CO₂ emissions and FDI have a cointegration relationship with the trade on the lag of one-period. Russia and India and CO₂ emissions and trade have a cointegration relationship with FDI on the lag of one-period. In the long-term, Brazil’s FDI has a long-term causal relationship with the trade on the lag of one-period. The trade between Russia and India has a long-term causal relationship with FDI on the lag of one-period. Among other BRICS variables, Russian trade and FDI on the lag of one-period of CO₂ emissions and FDI and CO₂ emissions are on the lag of one-period on trade, which McNown et al. mentioned is the degeneration case #1 in their paper; while China’s trade and FDI on the lag of one-period of CO₂ emissions is the country of degeneration case #2. When we examined short-term causality, we found that CO₂ emissions showed a causal relationship with trade, while FDI and CO₂ emissions were less pronounced. Trade has a positive causal relationship with FDI. These variables are different in different situations and in different countries. These results should be related to BRICS countries’ FDI, international trade development, and their different CO₂ emission policies.

We used the Bootstrap ARDL method to test the relationship between the export trades, FDI and CO₂ emissions of the BRICS countries. We found that China's foreign direct investment and the lag one period of CO₂ emissions have a cointegration on exports. South Africa's foreign direct investment and CO₂ emissions have a cointegration relationship with the lag one period of exports, and South Africa's the lag one period of exports and foreign direct investment have a cointegration relationship with the lag one period of CO₂ emissions. But whether it is China or South Africa, these three variables have no causal relationship in the long-term. Among the variables of other BRICS countries, Russia is the only country showed degenerate case #1 in McNown et al. mentioned in their paper. When we examined short-term causality, we found that CO₂ emissions and export trade showed a reverse causal relationship, while FDI and carbon emissions were not so obvious. Export trade has a positive causal relationship with FDI. Those variables are different from different situations and different countries.