SPATIAL HETEROGENEITY IN CARBON EMISSIONS INTENSITY AND THE ROLE OF FOREIGN DIRECT INVESTMENT: EVIDENCE FROM INDIA’S ORGANIZED SECTOR MANUFACTURING PLANTS

Bishwanath Goldar and Piyali Majumder ()
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Bishwanath Goldar: Institute of Economic Growth, Delhi, India
Piyali Majumder: Faculty of Economics and Public Policy, Indian Institute of Management, Rohtak, Haryana, India

Climate Change Economics (CCE), 2025, vol. 16, issue 03, 1-27

Abstract: The nexus between foreign direct investment (FDI) inflows and carbon dioxide (CO2) emissions intensity is studied using plant-level data from the Annual Survey of Industries for the years 2014–2015 to 2018–2019. We estimate the CO2 emissions intensity for individual manufacturing plants during the analysis period, considering the fuel mix and the share of renewable energy sources (RES) used in different regions’ power supply. The econometric results show that, after controlling for industry affiliation, the CO2 emissions intensity of manufacturing plants with FDI is significantly lower than that of domestic plants. Further, there is a positive spillover effect, i.e., plants with FDI and having relatively low CO2 emissions intensity tend to reduce the CO2 emissions intensity of the domestic plants in the same industry and region.

Keywords: CO2 emissions intensity; renewable energy sources; foreign direct investment; carbon productivity; spillover effects; Indian manufacturing (search for similar items in EconPapers)
JEL-codes: F21 L60 Q42 Q53 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S2010007825500095

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