Does Foreign Direct Investment Harm the Environment in Developing Countries? Dynamic Panel Analysis of Latin American Countries

Jungho Baek and Yoon Jung Choi
Additional contact information
Yoon Jung Choi: Global Strategy Research Center, Korea Trade-Investment Promotion Agency, Seoul 06792, Korea

Economies, 2017, vol. 5, issue 4, 1-8

Abstract: This article sets out to study the FDI–environment nexus within a dynamic panel data framework. To that end, the pooled mean group (PMG) method of Pesaran et al. (1999) is used to assess the impact of FDI on CO 2 emissions, controlling for income and energy consumption, using a panel of 17 Latin American countries. Our results using the full sample show that FDI increases CO 2 emissions, confirming the pollution haven hypothesis. But when splitting the data into different income groups, FDI inflows only in high-income countries increase CO 2 emissions. In addition, CO 2 emissions with growth tend to increase monotonically within the full sample and middle-income countries. Finally, energy consumption is found to increase CO 2 emissions in all cases: the full sample, high-, middle- and low-income countries.

Keywords: CO 2 emissions; FDI; Latin America; panel analysis; PMG (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.mdpi.com/2227-7099/5/4/39/pdf (application/pdf)
https://www.mdpi.com/2227-7099/5/4/39/ (text/html)

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:gam:jecomi:v:5:y:2017:i:4:p:39-:d:116002

Access Statistics for this article

Economies is currently edited by Ms. Adore Zhou

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().