An Asymmetric Effect of Economic Growth, Foreign Direct Investment and Financial Development on the Quality of Environment in Nigeria

The study looks at the asymmetric impact of macroeconomic variables on quality of environment in Nigeria. The analysis incorporates data from the annual time series covering the 1970-2018 periods and applies the non-linear ARDL method for the empirical analysis. The findings show that negative and positive GDP escalates the quantity of carbon emissions, thereby worsening environmental sustainability. Through positive as well as negative shocks, FD leads to carbon emissions and FDI increases carbon emissions through positive shocks and decreases them by negative shocks. The positive shock from the FDI increases the CO2 emissions in Nigeria, resulting in environmental degradation. The research suggests implementing technology to promote the productive use of resources that would help boost environmental efficiency, increase long-run productivity and save energy. The lenders will ease financing for the energy sector and devote financial resources to ecologically friendly companies, rather than investing them in financing customers. FDI inflows should be tracked to curb CO2 emissions.