Investing in Green: Foreign Direct Investment Fingerprint on Nigeria's Renewable Energy and Carbon Footprint

This study examines the impact of Foreign Direct Investment (FDI) on green growth in Nigeria, focusing on renewable energy usage and carbon footprint. Using annual data from 1990 to 2022, the research employs a Non-linear Autoregressive Distributed Lag (NARDL) model to analyze the relationship between FDI and various indicators of green growth. The results indicate that FDI has a positive impact on green growth in Nigeria, both in the short and long term. Environmental policy stringency also shows a positive relationship with green growth, while carbon dioxide emissions demonstrate a negative correlation. The study finds that the relationship between FDI and green growth is non-linear, highlighting the importance of considering both the magnitude and direction of FDI inflows. The findings support the Porter Hypothesis, suggesting that well-designed environmental policies can stimulate innovation and competitiveness. Based on these results, the study recommends prioritizing policies to attract FDI in green sectors, enhancing environmental regulations, improving regulatory quality, implementing carbon pricing systems, and developing green finance initiatives. These strategies aim to maximize the positive impacts of FDI on green growth while mitigating potential negative environmental effects, positioning Nigeria as a leader in sustainable economic development in Africa.