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Title CO2 Emissions, Foreign Direct Investments, Energy
Author Suyi Kim (Hongik University)
Volume 35 Number 1
Pages 5-24 
Keywords CO2 Emissions, Energy Consumption, GDP, FDI, Panel VECM,
Abstract This paper examines the causal relationships among carbon dioxide (CO2) emissions,
energy consumption, gross domestic product (GDP), and foreign direct investments (FDI)
in 57 developing countries from 1980 to 2013. The results of the analysis based on panel
vector error correction model (VECM) indicate no direct short-run causality exists from
FDI to CO2 emissions. These results are also confirmed by regional analysis, wherein the
developing countries are divided into three regions. In the long run, a cointegrated
relationship is found among CO2 emissions, energy consumption, GDP, and FDI, which
supports the environmental Kuznets curve hypothesis. However, the long-run elasticity of
FDI on CO2 emissions is very small even though it is statistically significant. These results do
not support the pollution haven hypothesis of CO2 emissions through inward FDI in
developing countries.
File KER-20190101-35-1-01.pdf
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