How Does Inward FDI Affect CO2 Emissions? A Cross-Country Panel Analysis of the Moderating Effects of Regulatory Quality and Environmental Policy Stringency
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2024-07-05
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en
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This thesis investigates the impact of Foreign Direct Investment (FDI) inflows on carbon emissions, with a particular focus on the moderating effects of Regulatory Quality and Environmental Policy Stringency (EPS). The thesis examines data from 33 countries, primarily OECD members, over the period from 1990 to 2020. A panel data analysis using a fixed-effect model is employed. The findings indicate that higher FDI inflows lead to an increase in CO2 emissions. However, in countries with a high EPS, FDI inflows increase emissions less or may even lead to a decrease in emissions and an improvement in environmental quality. This latte result also holds true for countries that participate in more international environmental agreements, as examined in a larger sample of 163 countries worldwide. The results highlight the importance of investing in stringent environmental policies to mitigate environmental degradation.
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Faculteit der Managementwetenschappen