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Sustainable relationship between FDI, R&D, and CO 2 emissions in emerging markets: An empirical analysis of BRICS countries

Author

Listed:
  • Han-Sol Lee

    (Peoples' Friendship University of Russia, Moscow, Russia)

  • Yury N. Moseykin

    (Peoples' Friendship University of Russia, Moscow, Russia)

  • Sergey U. Chernikov

    (Peoples' Friendship University of Russia, Moscow, Russia)

Abstract

This paper empirically analyzes sustainable relations between inward FDI (IFDI), outward FDI (OFDI), the R&D expenditure ratio and CO2 emissions based on balanced panel data from the BRICS (namely, Brazil, Russia, India, China and South Africa) countries for the period 2003–2017. Generally, the results confirm a negative effect of IFDI and a positive effect of OFDI on the R&D expenditure ratio, both with statistical significance. Further exploration of the IFDI, OFDI and R&D impacts on CO2 emissions was based on an assumption that innovation development mitigates environmental pollution. The research outcome revealed positive associations between IFDI and the R&D expenditure ratio with CO2 emissions, showing the connection of environmental pollution to growth-focused national economic strategies. Based on these results, we recommend the following policies: (1) rethinking domestic industries protectionism trends and research support to enhance FDI spillover effects, (2) the drafting of New Development Bank specific environment-friendly investment programs aimed at innovation activities, and (3) looking into further easing the green technologies from developed countries.

Suggested Citation

  • Han-Sol Lee & Yury N. Moseykin & Sergey U. Chernikov, 2021. "Sustainable relationship between FDI, R&D, and CO 2 emissions in emerging markets: An empirical analysis of BRICS countries," Russian Journal of Economics, ARPHA Platform, vol. 7(4), pages 297-312, December.
    • Handle: RePEc:arh:jrujec:v:7:y:2021:i:4:p:297-312
    DOI: 10.32609/j.ruje.7.77285
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    More about this item

    Keywords

    foreign direct investment FDI research and development R&D environment pollution panel analysis.;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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