Sustainability comes from within: carbon dioxide emissions, FDI origin factor and institutional qualities in developing countries

Phuong Thao Dang ()
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Phuong Thao Dang: The Graduate School of East Asian Studies-Yamaguchi University

Economia Politica: Journal of Analytical and Institutional Economics, 2019, vol. 36, issue 2, No 5, 439-471

Abstract: Abstract Utilizing the Environmental Kuznets Curve (EKC) model, the study examines the environmental impacts of institutional variables in their relationships with foreign direct investment (FDI) in 23 developing countries. All six elements of government indicators are tested while controlling their interaction terms with the two types of FDI, which originate from developed and developing regions. There are two important findings: first, FDI is proven to be an important channel to deliver the environmental effects of institutional qualities. Second, FDI origin factor is critical to the nature of this interactive connection. FDI from developed economies is less affected by sociopolitical factors of a host country, while FDI from developing regions reacts differently in different domestic contexts. The study highlights the importance of institutional reform in the pursuit of sustainable development in the developing world, especially when most of emerging countries are prioritizing FDI-led strategy to fuel their rapid economic growth.

Keywords: EKC; FDI; FDI origin factor; Government indicators; Institutional variables; Policy (search for similar items in EconPapers)
JEL-codes: F21 O44 Q56 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40888-019-00151-x

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