Foreign direct investment and environmental degradation: Can intellectual property rights help G20 countries achieve carbon neutrality?

Marco Túlio Dinali Viglioni, Cristina Lelis Leal Calegario, Arthur Cesar Dinali Viglioni and Nádia Campos Pereira Bruhn

Technology in Society, 2024, vol. 77, issue C

Abstract: The G20 comprises rich, industrialized, and powerful nations that advance the world economy through foreign direct investment (FDI). Nevertheless, these countries account for the largest share of global carbon dioxide emissions (CO2). Enforcing intellectual property rights (IPRs) has become a useful tool for stimulating clean technologies to mitigate climate change. This study examines how IPR enforcement moderated the inflow of FDI and carbon emissions in the G20 from 2001 to 2017. We applied the Driscoll-Kraay robust standard error technique, Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS), and Dumitrescu-Hurlin causality tests. The results show that FDI increases emissions, thus confirming the pollution haven effect. Long-term estimates suggest that the moderating role of IPRs in FDI significantly reduces environmental degradation. Causality analysis shows that FDI causes CO2 emissions in the long run, and carbon emissions enforce IPR regulations. Furthermore, we observed bidirectional causality between IPRs, FDI relationships, and carbon emissions. Based on these results, policymakers should enhance IPR policies and encourage clean technology through FDI among G20 members. In addition, governments should promote the clean-up of industrial processes, green finance, and the consumption of eco-friendly technologies, such as renewable energy, to achieve carbon neutrality.

Keywords: Carbon emissions; CO2; Foreign direct investment; Intellectual property rights; Institutional quality; Developed and developing countries (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0160791X24000496
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:teinso:v:77:y:2024:i:c:s0160791x24000496

DOI: 10.1016/j.techsoc.2024.102501

Access Statistics for this article

Technology in Society is currently edited by Charla Griffy-Brown

More articles in Technology in Society from Elsevier
Bibliographic data for series maintained by Catherine Liu ().