Does Air Pollution Crowd Out Foreign Direct Investment Inflows? Evidence from a Quasi-natural Experiment in China

A huge foreign direct investment (FDI) inflow has been witnessed in China, though on the one hand, it brings a significant contribution to economic growth. On the other hand, it adversely affects the ambient air pollution that may affect human mortality in the country. Renewable energy (RE) usage meets the country's energy needs with no adverse effect on the environment. Therefore, this study is trying to empirically analyze the effect of FDI inflow on human morality and RE consumption in China. We used time-series data for 1998–2020 and applied a non-linear ARDL approach for the estimations. The empirical outcomes suggest that FDI inflow positively affects mortality and RE. There is also unidirectional causality running from RE and pollution to mortality. In addition, the relationship among the variable verifies the existence of a non-linear relationship. The government needs policy guidelines to further boost FDI inflow due to its positive aspects. However, to reduce the negative effect on the environment and human morality, the extensive usage of RE should be adopted. Indeed, proper legislation for foreign firms might be a good step toward quality environmental and longevity of human health in society.

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Determinants of foreign direct investment inflows: A case of the Visegrad countries

JOURNAL OF INTERNATIONAL STUDIES ◽

10.14254/2071-8330.2018/11-2/15 ◽

2018 ◽

Vol 11 (2) ◽

pp. 222-235 ◽

Cited By ~ 2

Author(s):

Aneta Bobenič Hintošová ◽

Michaela Bruothová ◽

Zuzana Kubíková ◽

Rastislav Ručinský

Keyword(s):

Foreign Direct Investment ◽

Direct Investment ◽

Visegrád Countries ◽

Foreign Direct Investment Inflows

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THE CONTRIBUTION OF FDI AND FINANCIAL DEVELOPMENT ON ECONOMIC GROWTH IN SRI LANKA

International Journal of Engineering Technologies and Management Research ◽

10.29121/ijetmr.v8.i1.2021.838 ◽

2021 ◽

Vol 8 (1) ◽

pp. 25-34

Author(s):

Sarojini Maheswaranathan ◽

K.M.N. Jeewanthi

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Sri Lanka ◽

Private Sector ◽

Financial Development ◽

Direct Investment ◽

Capital Investment ◽

Bank Credit ◽

Percent Increase ◽

Foreign Direct Investment Inflows

The present study investigates the relationship between financial development, Foreign direct investment and economic growth in Sri Lanka for the period 1980 to 2019 by applying the Augmented Dickey-Fuller Unit root test along with the ARDL approach in process of achieving the desired objective. The outcome of this study shows that except GDP and FDI all other variables such as Capital investment as a percent of GDP (CI), Bank credit to the private sector as a percent of GDP (BCP), net foreign direct investment inflows in % of GDP (FDI) are stationary at first difference. The findings reveal that net foreign direct investment inflows are a positive relationship with economic growth in the long run. It means a one percent increase in net foreign direct investment inflows increases the GDP by 0.826439 percent. At the same time, a one percent increase in bank credit to the private sector decreases the GDP by 0.864320 percent. Moreover, in the short run FDI, CI and BCP have a positive and significant impact on GDP. Diagnostic tests such as normality test, heteroskedasticity and serial autocorrelation are employed to validate parameter estimation outcomes. Further, the stability of the variables confirms by the CUSUM test. The country should propose Strategies to boost the growth of efficient domestic financial institutions and encourage policy to attract greater FDI inflows that meet the needs of the knowledge-based economy.

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