How are FDI and green recovery related in Southeast Asian economies?

Thanh Quang Phung (), Ehsan Rasoulinezhad () and Hang Luong Thi Thu ()
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Thanh Quang Phung: National Economics University
Ehsan Rasoulinezhad: University of Tehran
Hang Luong Thi Thu: National Economics University

Economic Change and Restructuring, 2023, vol. 56, issue 6, No 1, 3735-3755

Abstract: Abstract This study is to examine how FDI and green economic growth are related in Southeast Asian economies. It also attempts to find out the role of fiscal policy development in the relationship between FDI and green growth in the economies of the region. For this purpose, a dynamic panel threshold model is used for the data over the period 2000–2018. The main results show that FDI has a positive impact on the progress of green growth in these economies, with a stronger impact in the group of Southeast Asian economies with high fiscal development. This result confirms the pollution halo hypothesis, which states that FDI can promote green growth in a country. Aligning economic priorities to improve green fiscal policies, reforming fiscal integration programs, planning for green job creation, and implementing policies to attract FDI are recommended as important policy implications over the COVID-19 period.

Keywords: Green recovery; Fiscal policy development; FDI; The pollution halo hypothesis; GMM approach; Southeast Asia (search for similar items in EconPapers)
JEL-codes: F21 J21 O33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (38)

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DOI: 10.1007/s10644-022-09398-0

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