This study examines the symmetric and asymmetric nexus between capital investment, economic growth, foreign direct investment, and CO2 emissions in Oman during 1980- 2019. For this purpose, we applied ARDL Model for linear cointegration and NARDL model for nonlinear cointegration between capital investment, economic growth, foreign direct investment, and CO2 emissions. The bound test shows the long-term equilibrium relationship among CO2 emissions, capital investment, economic growth, and FDI in both models. The error correction mechanism demonstrates that CO2 emissions congregate to their long-run equilibrium level at a 50.1 percent annual pace of adjustment by integrating capital investment, economic growth, and FDI under the symmetric model. The causality test results show that carbon emissions and FDI, economic growth, and CO2 emissions exhibit bidirectional causal links. While, on the other hand, unidirectional causal links are running from capital investment to GDP. The asymmetric results show that positive shocks to FDI and economic growth have significant tumbling consequences on Oman's carbon dioxide emissions.
In contrast, negative shocks in FDI and economic growth substantially increase carbon dioxide emissions. The research findings also reveal that carbon dioxide emissions are more resilient to negative shocks in FDI and economic growth. Based on these results, this study accomplishes that abatement measures should consist of strategies to enhance the deepness of FDI and economic growth in the Oman economy.
JEL Classification: F21, Q56, C22