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Dynamics of FDI, Technological Transformation and Environmental Degradation in Developing Countries: A Panel Analysis

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  • Farwa Amjad
  • Bilal Mehmood

Abstract

This paper examines the relationship between FDI, technology and environment with an assessment of aggregated relationship, by technical composition and the mode of technology transferability through FDI. A panel data for 19 developing countries has been used to for 14 years of data. The empirical results have suggested that FDI is the significant variable in explaining the carbon emission in developing countries followed by energy consumption and technology transformation. Our findings suggest that to manage both energy consumption and FDI flows via investment in research and development (RDY) or energy efficiency demand to reduce CO2 emissions is not possible without stringent environmental regulations and without retaining the developing countries’ competitiveness.

Suggested Citation

  • Farwa Amjad & Bilal Mehmood, 2016. "Dynamics of FDI, Technological Transformation and Environmental Degradation in Developing Countries: A Panel Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(59), pages 3-24, March.
    • Handle: RePEc:rej:journl:v:18:y:2016:i:59:p:3-24
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    More about this item

    Keywords

    CO2 emissions; Foreign Direct Investment; Technological change; Energy consumption; Developing countries;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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