Relationship Between Environment And Corporate Credit, Industrial Activities In Southeast Asia And East Asia Cointries

Abstract

Environmental pollution casts a long shadow across all facets of human activity, demanding solutions from the financial, business, and manufacturing sectors. This study delves into the intricate relationship between foreign direct investment (FDI), industrialization, and environmental pollution in 14 East and Southeast Asian countries from 1990 to 2020. Utilizing data from the World Bank's World Development Indicators, the research employs sophisticated statistical methods (Pool Mean Group and Dynamic Fixed Effect) to illuminate some surprising findings. Contrary to initial expectations, the study reveals a counterintuitive relationship. While industrialization, on its own, demonstrably increases pollution levels, the presence of FDI in the manufacturing sector seems to mitigate this negative impact. This suggests that foreign investment may bring with it cleaner technologies and practices, ultimately leading to a pollution-reduction effect alongside industrial growth. The study's conclusions offer valuable insights for policymakers. To foster a future of sustainable development, efforts should be directed towards promoting environmentally friendly industrial practices by removing obstacles that facilitate credit and suggesting incentivizing mechanisms from the government.