Dynamic link between bilateral FDI, the quality of environment and institutions: evidence from G20 countries

Tripathy, Prajukta; Khatua, Monalisa; Behera, Pragyanrani; Satpathyy, Lopamudra D.; Jena, Pabitra Kumar; Mishra, Bikash Ranjan

doi:10.1007/s11356-021-18368-4

Cited by 12 publications

(10 citation statements)

References 110 publications

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“…Our empirical finding of a positive and highly significant (p ≤ 0.01) long-run relationship between FDI and inflation in the case of GCC countries is consistent with the results of [ 30 , 31 , 55 , 60 – 62 ]. The phenomenon of higher inflation with higher inward FDI is widely accepted across countries, be they developing, emerging, or developed.…”

Section: Discussionsupporting

confidence: 90%

“…In recent times, many studies investigated it and found a positive relationship between GDP growth and FDI, and they include studies by [ 40 ] on MENA countires, [ 34 ] on highly emerging BRICS countries, [ 37 ] on China, [ 42 ] on 124 countires, [ 1 ] on Europe, [ 33 ] on West African regions, [ 46 ] on OECD countries, [ 6 ] on Brazil, [ 47 ] on China, [ 7 ] on Caribbean countries, [ 48 ] on China, [ 49 ] on 15 countries, [ 50 ] on 189 countries, [ 51 ] on Greece, [ 52 ] on 151 countries, and [ 53 ] on China and ASEAN countries. On the other hand, a few studies noted that higher GDP levels reduce FDI significantly, and they include studies by [ 54 ] on BRIC countries (Brazil, Russia, India and China) and CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) countries, [ 55 ] on G20 countries, and [ 56 ] on 33 countries. Also, some studies found an insignificant relationship between FDI and GDP growth, and they include [ 57 ] on 165 countries, [ 58 ] on GCC countries, and [ 59 ] on Mexico.…”

Section: Literature Review and Hypotheses Formulationmentioning

confidence: 99%

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Determinants that attract and discourage foreign direct investment in GCC countries: Do macroeconomic and environmental factors matter?

Alharthi,

Islam,

Alamoudi

et al. 2024

PLoS ONE

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In general, foreign direct investments (FDIs) play a crucial role in driving a country’s economic development, promoting diversification, and enhancing competitiveness. The Gulf Cooperation Council (GCC) countries, which heavily rely on the oil and gas sectors, are particularly vulnerable to fluctuations in commodity prices. However, these countries have recognized the imperative of economic diversification and have increasingly turned to inward FDIs to achieve it. By attracting capital, advanced technology, and expertise from foreign investors, FDIs enable the GCC countries to expand their economic base beyond the oil and gas sectors. This diversification not only creates employment opportunities but also fosters resilient economic growth, ultimately leading to an improvement in the living standards of the local population. This study investigates the macroeconomic and environmental factors that potentially attract foreign direct investment (FDI) inflows into the Gulf Cooperation Council (GCC) countries in the long run. Additionally, the study explores the causal relationship between these factors and FDI inflows. The panel autoregressive distributed lag (ARDL) approach to co-integration is the primary analytical technique used, utilizing long time-series data from six GCC countries, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE) during the period 1990–2019. The empirical results indicate that, in the long run, almost all independent variables significantly influence FDI in GCC countries. Variables such as GDP growth (GDPG), inflation (INFL), carbon dioxide emissions (CO2), and urbanization (URB) are found to be highly significant (p≤0.01) in their impact on FDI. Moreover, unemployment (UNEMP) also positively and significantly influences FDI in these countries in the long run. Based on the key findings, strategies aimed at reducing persistently high unemployment rates, maintaining population growth, viewing FDI as a driver for GDP growth, and continuing with infrastructure development and urbanization are expected to attract more FDI inflows into GCC countries in the long run. Additionally, fostering both long-term economic incentives and creating a conducive business infrastructure for investors are vital for attracting inward FDI into any nation, including those in the GCC. This research would benefit various stakeholders, including governments, local businesses, investors, academia, and the local society, by providing valuable knowledge and informing decision-making processes related to economic development, diversification, and investment promotion.

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Section: Discussionsupporting

confidence: 90%

Section: Literature Review and Hypotheses Formulationmentioning

confidence: 99%

Determinants that attract and discourage foreign direct investment in GCC countries: Do macroeconomic and environmental factors matter?

Alharthi,

Islam,

Alamoudi

et al. 2024

PLoS ONE

View full text Add to dashboard Cite

show abstract

“…According to the findings, significant and robust policy changes and institutional reforms are required to improve environmental quality. Tripathy et al [54] analyzed the influence of FDI inflow, IQ, and carbon emissions in 19 selected G20 nations from 2009 to 2017. The data show that FDI is inversely related to carbon footprint and positively related to macroeconomic performance.…”

Section: Literature Reviewmentioning

confidence: 99%

Opportunities for Post−COP26 Governance to Facilitate the Deployment of Low−Carbon Energy Infrastructure: An Open Door Policy

Imran

Khan

Zaman

et al. 2023

Climate

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Temperatures worldwide continue to climb, while carbon emissions have exceeded previous records. To achieve environmental sustainability, countries with the Kyoto Protocol and Paris Agreement (COP26) demonstrate sophisticated technical expertise and deploy environmentally driven technologies, such as greenfield investment and renewable energy infrastructure. This proposal presents an intriguing opportunity for policymakers to identify the distinct characteristics of institutional reforms and green energy sources that may be used to mitigate carbon emissions. Governance regulatory factors, foreign direct investment (FDI), renewable energy consumption (REC), research and development expenditures, urbanization, and carbon emissions are examined in Pakistan. The study estimated the short- and long-run association between the variables using the ARDL bounds testing method for 1996Q1 to 2020Q4. In the short run, in terms of carbon emissions and economic output, the country has an upturned cord environmental Kuznets curve (EKC). The race-to-the-bottom concept holds for countries with U-shaped EKCs in the long term. The negative correlation between overseas investment and environmental damage supports the environmental halo hypothesis. Investment in research and technology may reduce emissions, even though urbanization increases them. Future and present REC are often intertwined with carbon footprints. Carbon emissions are also strongly connected with indicators of institutional quality (IQ), such as procedural efficiency, administrative effectiveness, and political unrest. The research findings demonstrated unidirectional Granger causality running from urbanization, government effectiveness, economic growth, and R&D expenditures to carbon emissions to validate urban-led emissions, institutional-led emissions, growth-led emissions, and innovation-led emissions in a country. Furthermore, R&D expenditure Granger causality was linked to inbound FDI, while government effectiveness Granger causality was linked to REC and R&D expenditures. Following the COP26 guidelines for achieving shared prosperity, the study concluded that good governance reforms, R&D expenditures, greenfield investment, and REC promote environmental sustainability and maintain air quality.

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“…Two-way FDI (IFDI and OFDI) will play an increasingly important role during industry green development. In fact, its significant effects have been verified [10,11]. With the gradual formation of China's "world factory" status and the deepening of the global supply chain, multinational corporations layout and operate the production network in China, thus attracting international logistics enterprises to enter, and inward foreign direct investment has gradually infiltrated into China's logistics industry.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Two-way FDI on Green Development Quality of the Logistics Industry – Based on the Threshold Effect of Environmental Regulation

Li¹,

Meng²,

Huang³

et al. 2022

Pol. J. Environ. Stud.

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As the main way of international capital flow and an important carrier of international technology spillover, have inward foreign direct investment (IFDI) and outward foreign direct investment (OFDI) improved the green development quality of the logistics industry? Based on the panel data of 27 provinces in China from 2006 to 2015, this paper uses the panel model to empirically test the impact of two-way FDI on the green development quality of the logistics industry. This paper mainly draws the following research conclusions: (1) Two-way FDI had significantly improved the green development quality of the logistics industry, and the promotion effect of IFDI was stronger than that of OFDI, indicating that two-way FDI is a key approach of enhancing the quality of the green development.(2) The impact of two-way FDI on the green development quality has spatial-temporal heterogeneity. Specifically, only in the eastern region, IFDI and OFDI have played a significant role in promoting the green development of the logistics industry at the same time; the role of IFDI in improving the green development quality of the logistics industry has weakened over time, while OFDI has strengthened.(3) The effect of two-way FDI on the green development quality of the logistics industry was affected by the environmental regulation intensity. With the improvement of environmental regulations intensity, the impact of IFDI on the green development quality of the logistics industry presents an "inverted U" trend that first rises and then decreases. The impact of OFDI on the green development quality of the logistics industry presents a gradually increasing characteristic.

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Dynamic link between bilateral FDI, the quality of environment and institutions: evidence from G20 countries

Cited by 12 publications

References 110 publications

Determinants that attract and discourage foreign direct investment in GCC countries: Do macroeconomic and environmental factors matter?

Determinants that attract and discourage foreign direct investment in GCC countries: Do macroeconomic and environmental factors matter?

Opportunities for Post−COP26 Governance to Facilitate the Deployment of Low−Carbon Energy Infrastructure: An Open Door Policy

The Impact of Two-way FDI on Green Development Quality of the Logistics Industry – Based on the Threshold Effect of Environmental Regulation

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