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Impact of Energy and Natural Resources Rent on FDI: An Analysis through POLS, DK, 2SLS and GMM Models

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  • Sujan Chandra Paul
  • Md. Harun Or Rosid
  • Jyotirmay Biswas

Abstract

The study aims to look into the effect of electricity, energy, and natural resource rent on Foreign Direct Investment (FDI). Panel data from 198 countries was compiled for the period 1990 to 2018. The OLS, POLS, DK, 2SLS, and GMM models are used in this study. In all of the models, we discovered that access to energy is positively related with FDI. In all models except POLS and GMM, the energy intensity level of primary energy and green power output had a significant positive relationship with FDI. In POLS model, energy intensity level of primary energy and renewable electricity output has significant negative relationship with FDI and in GMM model there is insignificant relationship. Renewable energy consumption has significant positive relationship with FDI in all the models except GMM model. Total natural resource rents have mixed relationship with FDI in different models. In POLS and GMM model, it has significant positive relationship with FDI and in the other model, there are insignificant relationship with FDI at 10% significance level.

Suggested Citation

  • Sujan Chandra Paul & Md. Harun Or Rosid & Jyotirmay Biswas, 2021. "Impact of Energy and Natural Resources Rent on FDI: An Analysis through POLS, DK, 2SLS and GMM Models," Energy Economics Letters, Asian Economic and Social Society, vol. 8(2), pages 122-133.
    • Handle: RePEc:asi:eneclt:v:8:y:2021:i:2:p:122-133:id:190
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    Cited by:

    1. Nyiko Worship Hlongwane & Realeboga Mahapa & Tselane Confidence Nthebe, 2023. "The Nexus between Foreign Direct Investment and Electricity Consumption in South Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 213-220, September.

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