The moderating effect of geopolitical risk in the nexus between trade openness, FDI, and carbon emissions in Saudi Arabia

IF 5.6 Q1 ENVIRONMENTAL SCIENCES

Environmental and Sustainability Indicators Pub Date : 2025-10-08 DOI:10.1016/j.indic.2025.100967

Mohammed Sultan Alsubaie , Muhammad Tanveer , Haider Mahmood

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Abstract

Geopolitical Risk (GPR) can directly impact a country's environmental conditions and may also have indirect effects through Foreign Direct Investment (FDI) and trade. This study investigates the determinants of CO₂ emissions by examining the roles of income, Trade Openness (TO), FDI, and GPR in the Environmental Kuznets Curve (EKC) framework in Saudi Arabia from 1985 to 2023. Moreover, the moderating role of GPR is also investigated in the relationships between TO, FDI, and the environment. The results show that the EKC hypothesis is substantiated, and FDI and TO raise CO₂ emissions. Moreover, GPR is found to significantly increase emissions. Thus, GPR weakens institutional commitment to environmental regulations and deters clean energy investments. In addition, the interaction terms of GPR with TO and FDI reveal that under high geopolitical risk, the environmental impacts of TO and FDI are increased. Thus, geopolitical uncertainty amplifies the negative environmental externalities of globalization. The findings of this research suggest regulating TO, FDI, and GPR to enhance environmental sustainability.

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地缘政治风险在沙特阿拉伯贸易开放、FDI和碳排放关系中的调节作用

地缘政治风险（GPR）可以直接影响一个国家的环境状况，也可能通过外国直接投资（FDI）和贸易产生间接影响。本研究通过考察1985年至2023年沙特阿拉伯环境库兹涅茨曲线（EKC）框架中收入、贸易开放度（TO）、FDI和GPR的作用，探讨了二氧化碳排放的决定因素。此外，本文还探讨了GPR在TO、FDI和环境三者之间的调节作用。结果表明，EKC假设得到证实，FDI和TO增加了CO2排放量。此外，GPR还会显著增加排放。因此，GPR削弱了机构对环境法规的承诺，阻碍了清洁能源投资。此外，GPR与TO和FDI的交互项显示，在地缘政治风险较高的情况下，TO和FDI的环境影响增大。因此，地缘政治的不确定性放大了全球化的负面环境外部性。本文的研究结果建议通过调控对外直接投资、FDI和GPR来提高环境的可持续性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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