The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia

Duc Vo

MPRA Paper from University Library of Munich, Germany

Abstract: This study is conducted to examine the concerns of the foreign direct investment (FDI) causing environment degradation and also to test the validity of the traditional Environmental Kuznets Curve (EKC) in the context of emerging markets in the Asian region. Data of these countries from 1980–2016 are utilised. This study employs panel cointegration Fully Modified Ordinary Least Squares (FMOLS), which treats the endogeneity problem, and its estimators are adjusted for serial correlation. Moreover, this study also uses panel Dynamic Ordinary Least Squares (DOLS), which includes contemporaneous value, leads and, lags of the first di�erence of the regressors to correct endogeneity problems and serial correlations. Findings from this study indicate that the pollution heaven hypothesis and the EKC curve are generally valid in the region. In addition, FDI has a strong impact on the environment.

Keywords: FDI; environment degradation; pollution heaven hypothesis FMOLS; DOLS; causality; Vietnam (search for similar items in EconPapers)
JEL-codes: Q4 Q43 Q48 Q5 Q56 (search for similar items in EconPapers)
Date: 2019-05-10
New Economics Papers: this item is included in nep-env, nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:103292

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