Outward US Foreign Direct Investment and Environmental Degradation

2019 ◽  
pp. 252-268
Author(s):  
João Bento ◽  
Miguel Torres ◽  
Paolo Maranzano
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Degradation ◽  
Carbon Dioxide Emissions ◽  
Financial Incentives ◽  
Environmental Kuznets Curve ◽  
Direct Investment ◽  
Dynamic Panel Data ◽  
Kuznets Curve ◽  
Host Countries ◽  
Host Government

This chapter analyzes whether US outward foreign direct investment contributes to mitigating environmental degradation in host countries or not. This relationship is investigated within the environmental Kuznets curve framework, using dynamic panel data models which include trade openness and environmental regulation as controlling variables. The results lend support to the existence of an environmental Kuznets curve hypothesis. Moreover, the results indicate that capital expenditures from majority-owned foreign affiliates of US multinationals decrease carbon dioxide emissions per capita and provide support for the pollution halo hypothesis. The findings suggest that foreign direct investments carried out by firms with their headquarters based in the United States of America enhance the natural environment. These findings offer some support for host government policies offering generous financial incentives to attract environmentally friendly investments to improve environmental sustainability.

scholarly journals Interrelationships Among Carbon Emission, Economic Growth, Energy Consumption and Foreign Direct Investment in Eurasian Countries

2021 ◽  
Author(s):  
Özge Yüksel
Keyword(s):  
Foreign Direct Investment ◽  
Energy Consumption ◽  
Unit Root ◽  
Environmental Kuznets Curve ◽  
Direct Investment ◽  
Carbon Emission ◽  
Carbon Dioxide Emission ◽  
Kuznets Curve ◽  
Environmental Kuznets Curve Hypothesis ◽  
The Impact

The main aim of this study is to empirically investigate the impact of energy consumption and foreign direct investments on carbon emissions and the validity of the Environmental Kuznets Curve hypothesis in Eurasian countries over the period of 1993-2013. In this context, firstly cross-section dependency and homogeneity tests were applied for the the panel. The existence of unit root was investigated by one of the second-generation unit root test CIPS. The cointegration relationship between the variables was investigated with the Gengenbach, Urbain ve Westerlund panel cointegration test and finally, the causality relationship was examined using the Dumitrescu and Hurlin causality test. Empirical results indicate that there is no cointegraion between carbon dioxide emission representing environmental pollution and other variables. Also, it was concluded that the inverted U-shaped Environmental Kuznets curve hypothesis is not valid. There is a bidirectional causality between carbon emission and GDP, the square of GDP, energy consumption and foreign direct investment.

scholarly journals The Nexus between Environmental Degradation, Income and Energy Consumption in Emerging Countries

2016 ◽  
Author(s):  
Cengiz Aytun ◽  
Cemil Serhat Akın ◽  
Neşe Algan
Keyword(s):  
Carbon Dioxide ◽  
Energy Consumption ◽  
Environmental Pollution ◽  
Environmental Degradation ◽  
Emerging Economies ◽  
Carbon Dioxide Emissions ◽  
Environmental Kuznets Curve ◽  
Estimation Methods ◽  
Kuznets Curve ◽  
Environmental Kuznets Curve Hypothesis

Today, especially in developing countries, environmental pollution threatens human life. Environmental quality is one of the most important sources of human welfare. Therefore, it is becoming increasingly important to understand the relationship between environmental degradation, income and energy consumption. The aim of this study is to investigate the nature of relationships among the carbon dioxide emissions, economic growth and energy consumption for emerging economies. For this purpose, Environmental Kuznets Curve hypothesis have been tested for 10 emerging economies for the years from 1980 to 2010. Data were brought together from the World Bank development indicators database. In order to test of Environmental Kuznets Curve hypothesis IPS panel unit root, Pedroni panel cointegration and FMOLS estimation methods are used. Results indicate that energy consumption has a positive and significant effect on carbon dioxide emissions. Results indicate that energy consumption has a positive and significant effect on carbon dioxide emissions. The findings also show that per capita GDP follows an inverted U-shape pattern associated with the Environmental Kuznets Curve hypothesis. This situation validates the policies which assert that environmental pollution decreases with income growth.

scholarly journals Capital Movements and Environmental Harms

2011 ◽  
pp. 482-497 ◽  
Author(s):  
Christopher Dick ◽  
Andrew K. Jorgenson
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Degradation ◽  
Carbon Dioxide Emissions ◽  
Direct Investment ◽  
Social Dynamics ◽  
Theoretical Orientation ◽  
Developed Countries ◽  
Longitudinal Analyses ◽  
Capital Movements ◽  
Inward Foreign Direct Investment

The authors engage appropriate macrosociological theorization and employ quantitative comparative methods to assess the extent to which various forms of environmental degradation in less-developed countries are tied to inward foreign direct investment in the primary and secondary sectors. Analyzed outcomes include carbon dioxide emissions, industrial organic water pollution, and deforestation. Such forms of environmental harms are known to partially shape migration processes as well as other social dynamics. Results of longitudinal analyses indicate that all three forms of environmental degradation are positively associated with sector-level inward foreign direct investment, which provides broad support for the engaged theoretical orientation.

Enhancing Regulatory, Financial, Fiscal Investment Incentives as a Means of Promoting Foreign Direct Investment

2016 ◽  
pp. 191-201
Author(s):  
Jon Edwards ◽  
Sarah Newton
Keyword(s):  
Foreign Direct Investment ◽  
Human Resources ◽  
Foreign Investment ◽  
Financial Incentives ◽  
Direct Investment ◽  
Investment Incentives ◽  
Investment Climate ◽  
Fiscal Incentives ◽  
Survey Results ◽  
Host Government

According to UNCTAD, regulatory incentives, which include “lowering of environmental, health, safety or labor standards; temporary or permanent exemption from compliance with applicable standards; stabilization clauses guaranteeing that existing regulations will not be amended to the detriment of investors”, in addition to financial incentives, are considered “less important policy tools for attracting and benefiting from Foreign Direct Investment.” Whilst survey results, also illustrate that fiscal incentives are the most important type for attracting and benefiting from foreign investment, it is also highlighted that certain scenarios exist whereby investment incentives could be regarded as “compensation for information asymmetries between the investor and the host government, as well as for deficiencies in the investment climate, such as weak infrastructure, underdeveloped human resources.” This chapter not only explores how environmental incentives can serve as means of attracting investment, but also contributes to the literature on how their effectiveness could be enhanced.

scholarly journals Drivers of CO2-Emissions in Fossil Fuel Abundant Settings: (Pooled) Mean Group and Nonparametric Panel Analyses

Energies ◽  
2020 ◽  
Vol 13 (15) ◽  
pp. 3956 ◽  
Author(s):  
Elkhan Richard Sadik-Zada ◽  
Wilhelm Loewenstein
Keyword(s):  
Carbon Dioxide ◽  
Carbon Dioxide Emissions ◽  
Environmental Kuznets Curve ◽  
Fixed Effects ◽  
Fossil Fuel ◽  
Substantial Reduction ◽  
Resource Curse ◽  
Time Interval ◽  
Kuznets Curve ◽  
Per Capita

The present inquiry addresses the income-environment relationship in oil-producing countries and scrutinizes the further drivers of atmospheric pollution in the respective settings. The existing literature that tests the environmental Kuznets curve hypothesis within the framework of the black-box approaches provides only a bird’s-eye perspective on the long-run income-environment relationship. The aspiration behind this study is making the first step toward the disentanglement of the sources of carbon dioxide emissions, which could be employed in the pollution mitigation policies of this group of countries. Based on the combination of two strands of literature, the environmental Kuznets curve conjecture and the resource curse, the paper at hand proposes an augmented theoretical framework of this inquiry. To approach the research questions empirically, the study employs advanced panel cointegration techniques. To avoid econometric misspecification, the study also employs for the first time a nonparametric time-varying coefficient panel data estimator with fixed effects (NPFE) for the dataset of 37 oil-producing countries in the time interval spanning between 1989 and 2019. The empirical analysis identifies the level of per capita income, the magnitude of oil rents, the share of fossil fuel-based electricity generation in the energy mix, and the share of the manufacturing sector in GDP as essential drivers of carbon dioxide emissions in the oil-rich countries. Tertiarization, on the contrary, leads to a substantial reduction of emissions. Another striking result of this study is that level of political rights and civil liberties are negatively associated with per capita carbon emissions in this group of countries. Furthermore, the study decisively rejects an inverted U-shaped income-emission relationship and validates the monotonically or exponentially increasing impact of average income on carbon dioxide emissions.

FOREIGN DIRECT INVESMENT OUTFLOWS AND ENVIRONMENTAL POLLUTION: HIDDEN COINTEGRATION ANALYSIS FOR TURKEY

2021 ◽  
Vol 6 (11) ◽  
pp. 165-182
Author(s):  
Ahmet Emrah TAYYAR
Keyword(s):  
Carbon Dioxide ◽  
Foreign Direct Investment ◽  
Environmental Pollution ◽  
Environmental Quality ◽  
Carbon Dioxide Emissions ◽  
Direct Investment ◽  
Causality Relationship ◽  
Cointegration Relationship

The relationship between foreign direct investment, which is a type of cross-border and long-term investment, and environmental quality is a current issue that is heavily debated. Foreign direct invesments can ensure economic growth and development of countries, while also causing a change in environmental quality. In the research conducted, it is seen that changes in carbon dioxide emissions with foreign direct capital inflows are mainly investigated from the point of view of the host countries. However, foreign direct invesment outflows may have an impact on the environmental quality of the home country. Because foreign direct invesment outflows can enable the transfer of more environmentally friendly techonogies to the country and strengthen management skills. The impact of foreign direct investment outflows on the home country's environmental pollution is shaped by many factors (scale, technique, and composition effects). In addition to these effects, it is necessary to pay attention to the regional and sectoral distribution of capital outflows. The main aim of this study is to examine the links between Turkey's foreign direct invesment outflows and carbon dioxide emissions for the period 1990-2018. For this reason, a unit root test was applied to variables whose natural logarithm was taken. Tests showed that all series are stable of the same degree. Engle&Granger(1987) and Granger&Yoon(2002) tests were used to determine the cointegration relationship between variables. The crouching error correction model(CECM) was applied to determine the causality relationship. According to the results of the analysis; i) In terms of the Engle&Granger(1987) test, there was no long-term relationship between variables. ii) According to the Granger&Yoon(2002) test, it was determined that there is a bidirectional hidden cointegration relationship between the positive shocks of carbon dioxide emissions and negative shocks of foreign direct invesment outflows. iii) There is a bidirectional asymmetric causality relationship between the positive shocks of carbon dioxide emissions and the negative shocks of foreign direct invesment outflows. iv) It is observed that 1% negative shocks in foreign direct invesment outflows reduce positive shocks in carbon dioxide emissions by 0,26%. As a result, since negative situations in foreign direct invesment outflows have an effect on improving the quality of the environment, the environmental dimension should be taken into account in the policies to be made.

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