Do greater amounts of FDI cause higher pollution levels? Evidence from OECD countries |
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Institution: | 1. University of Beira Interior, Management and Economics Department, Rua Marquês d’Ávila e Bolama, 6201-001 Covilhã, Portugal;2. NECE-UBI, University of Beira Interior, Portugal |
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Abstract: | Using an ARDL model for a panel of 15 OECD countries, this work analyses the impact that FDI, both jointly and by sector, has on CO2 emissions. The findings reveal that these countries are yielding to the pressure on the trade sector. Unexpectedly, gross fixed capital formation shrink pollution, excluding in the mining sector. With findings supporting the Pollution Haven Hypothesis, policymakers must pay attention to FDI inflows, ensuring that FDI place high importance on the transfer of green technologies to improve the efficiency. These goals could be achieved through an increase in the stringency of environmental laws within the host countries, especially the ones related to FDI. |
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Keywords: | Foreign direct investment Carbon dioxide emissions Pollution Autoregressive distributed lag Pollution Haven Hypothesis F2 F18 L6 L7 L8 |
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