The Impact Of FDI Inflow On The Environment: A Case Of The Baltic-Black Sea Region Countries

Abstract

The article summarizes the arguments within the scientific challenge on improving approaches to estimate the environmental impact of FDI inflow on the economy. The main objective of the research is to systematize the existing statistical approaches to analyze whether and how the macroeconomic determinants could impact the environment in terms of greenhouse gas emissions. Systematization of theoretical and methodological materials on solving the problem of choice of applying more or less stringent environmental regulations with addition to more efficient industrial technologies which are supposed to have a positive impact on the environment. The relevance of solving this problem is that inceptive of FDI inflow could provide the economy with resources that reduce pollution, create better conditions for workers and local citizens. On the other hand, FDI is not interested in investing in economies with strict environmental legislation. The methodical tools of the research are carried out in the following logical sequence: the systematization of existing statistical methods panel data analysis; analysis of data that will be used in the estimation model and in further country environmental policymaking process; application of fixed and random effects models in estimation of the environmental impact of FDI on analyzed data. The research methods combine in the following dimensions: comparative analysis, regression analysis. The period from 1999 to 2018 was chosen as the research period. The objects of the research are foreign direct investment net inflows into the Baltic-Black Sea region countries` economies and their impact on its environment. The article presents the results of empirical analysis, which showed that FDI inflow has an impact on the environment, but it is severely limited by other more significant determinants. The pollution haven hypothesis in the Baltic-Black Sea trans-national region countries policy in attraction FDI has not been proved considering more strict high-standard environmental legislation in EU countries alongside with increase in GHG emission per capita. The results of the research can be useful within government policy-making processes considering the aim to incentivize FDI inflow. Keywords: country investment potential, environment, foreign direct investment, greenhouse gas emission, national economy.

Factors Influencing the Renewable Energy Consumption in Selected European Countries

“…However, in the study [99], the obtained results of the random effect model showed no statistically significant relationship between foreign direct investment and REC in the Eastern European and Central Asian countries during 1996-2018. Moreover, the regression analysis results of the panel data from the Baltic-Black Sea region countries during 1999-2018 [100] showed that the foreign direct investment inflow positively affects the ecological situation. At the same time, the strict standard environmental legislation and growth of greenhouse gas emissions in the analyzed countries are the main barriers in attracting foreign direct investments.…”

Convergence of Energy Policies between the EU and Ukraine under the Green Deal Policy

“…The authors [22], within the framework of the scientific discussion, investigate the issues related to searching for and improving the existing approaches for assessing the impact of CO 2 on the state of the environment and the economic stability of the country, which will allow for the opening of new directions (providing carbon financing for economic entities, developing energy management, etc.) [23,24] in increasing the country's competitiveness and energy security.…”

Energy Economic Development in Europe

“…In addition, the study applies the control variables that relate to the institutional and economic climate in the countries. The control variables are included because effective institutes are conducive to economic development [107,108], particularly within attracting investment [109][110][111]. From this point of view, the economic openness and effectiveness of government institutions are added to the model.…”