Sustainable relationship between FDI, R&D, and CO 2 emissions in emerging markets: An empirical analysis of BRICS countries

Han-Sol Lee (), Yury N. Moseykin () and Sergey U. Chernikov ()
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Han-Sol Lee: Peoples' Friendship University of Russia, Moscow, Russia
Yury N. Moseykin: Peoples' Friendship University of Russia, Moscow, Russia
Sergey U. Chernikov: Peoples' Friendship University of Russia, Moscow, Russia

Russian Journal of Economics, 2021, vol. 7, issue 4, 297-312

Abstract: This paper empirically analyzes sustainable relations between inward FDI (IFDI), outward FDI (OFDI), the R&D expenditure ratio and CO2 emissions based on balanced panel data from the BRICS (namely, Brazil, Russia, India, China and South Africa) countries for the period 2003–2017. Generally, the results confirm a negative effect of IFDI and a positive effect of OFDI on the R&D expenditure ratio, both with statistical significance. Further exploration of the IFDI, OFDI and R&D impacts on CO2 emissions was based on an assumption that innovation development mitigates environmental pollution. The research outcome revealed positive associations between IFDI and the R&D expenditure ratio with CO2 emissions, showing the connection of environmental pollution to growth-focused national economic strategies. Based on these results, we recommend the following policies: (1) rethinking domestic industries protectionism trends and research support to enhance FDI spillover effects, (2) the drafting of New Development Bank specific environment-friendly investment programs aimed at innovation activities, and (3) looking into further easing the green technologies from developed countries.

Keywords: foreign; direct; investment; FDI; research; and; development; R&D; environment; pollution; panel; analysis. (search for similar items in EconPapers)
JEL-codes: C01 O19 P33 P45 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:arh:jrujec:v:7:y:2021:i:4:p:297-312

DOI: 10.32609/j.ruje.7.77285

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