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Fdi, Growth And The Environment: Evidence From India On Co2 Emission During The Last Two Decades

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  • Joysri Acharyya

    () (Department of Economics, Lady Brabourne College)

Abstract

This paper examines two most important benefits and costs of foreign direct investment in the Indian context - GDP growth and the environment degradation. We find a statistically significant long run positive, but marginal, impact of FDI inflow on GDP growth in India during 1980-2003. On the other hand, the long run growth impact of FDI inflow on CO2 emissions is quite large. The actual impact on the environment, however, may be larger because CO2 emission is one of the many pollutants generated by economic activities. But CO2 being a global air pollutant, our finding has some far reaching implications for the global environment as well, with India having emerged as the fourth highest in the global ranking of CO2 emissions by turn of this century.

Suggested Citation

  • Joysri Acharyya, 2009. "Fdi, Growth And The Environment: Evidence From India On Co2 Emission During The Last Two Decades," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(1), pages 43-58, June.
  • Handle: RePEc:jed:journl:v:34:y:2009:i:1:p:43-58
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pasquale Pazienza, 2015. "The Environmental Impact of the FDI Inflow in the Transport Sector of OECD Countries and Policy Implications," International Advances in Economic Research, Springer;International Atlantic Economic Society, pages 105-116.
    2. Mohamed Abdouli & Sami Hammami, 2017. "Economic growth, FDI inflows and their impact on the environment: an empirical study for the MENA countries," Quality & Quantity: International Journal of Methodology, Springer, pages 121-146.
    3. Hassaballa, Hoda, 2014. "Testing for Granger causality between energy use and foreign direct investment Inflows in developing countries," Renewable and Sustainable Energy Reviews, Elsevier, pages 417-426.
    4. Aller, Carlos & Ductor, Lorenzo & Herrerias, M.J., 2015. "The world trade network and the environment," Energy Economics, Elsevier, pages 55-68.
    5. Zhang, Chuanguo & Zhou, Xiangxue, 2016. "Does foreign direct investment lead to lower CO2 emissions? Evidence from a regional analysis in China," Renewable and Sustainable Energy Reviews, Elsevier, pages 943-951.
    6. Lau, Lin-Sea & Choong, Chee-Keong & Eng, Yoke-Kee, 2014. "Investigation of the environmental Kuznets curve for carbon emissions in Malaysia: Do foreign direct investment and trade matter?," Energy Policy, Elsevier, pages 490-497.
    7. Saibal Kar & Devleena Majumdar, 2016. "MFN Tariff Rates and Carbon Emission: Evidence from Lower-Middle-Income Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 493-510.
    8. Svitlana Maksymenko & Mahbub Rabbani, 2011. "Economic Reforms, Human Capital, And Economic Growth In India And South Korea: A Cointegration Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(2), pages 39-59, June.
    9. Thongphet Lamphayphan & Toshihisa Toyoda & Chris Czerkawsk & Phouphet Kyophilavong, 2015. "Export Supply of Electricity from Laos to Thailand: An Econometric Analysis," International Journal of Energy Economics and Policy, Econjournals, pages 450-460.
    10. Yaya Keho, 2015. "Is Foreign Direct Investment Good or Bad for the Environment? Times Series Evidence from ECOWAS Countries," Economics Bulletin, AccessEcon, pages 1916-1927.
    11. repec:ksp:journ2:v:4:y:2017:i:1:p:106-118 is not listed on IDEAS
    12. Bilgili, Faik & Tülüce, Nadide Sevil Halıcı & Doğan, İbrahim, 2012. "The determinants of FDI in Turkey: A Markov Regime-Switching approach," Economic Modelling, Elsevier, pages 1161-1169.
    13. Dinh Hong Linh & Shih-Mo Lin, 2014. "CO2 Emissions, Energy Consumption, Economic Growth and FDI in Vietnam," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 12(3 (Fall)), pages 219-232.
    14. repec:eee:eneeco:v:64:y:2017:i:c:p:206-212 is not listed on IDEAS
    15. Adewuyi, Adeolu O., 2016. "Effects of public and private expenditures on environmental pollution: A dynamic heterogeneous panel data analysis," Renewable and Sustainable Energy Reviews, Elsevier, pages 489-506.
    16. Shahbaz, Muhammad & Nasreen, Samia & Abbas, Faisal & Anis, Omri, 2015. "Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries?," Energy Economics, Elsevier, pages 275-287.
    17. Avik Sinha, 2015. "Modeling Energy Efficiency and Economic Growth: Evidences from India," International Journal of Energy Economics and Policy, Econjournals, pages 96-104.
    18. Tang, Chor Foon & Tan, Bee Wah, 2015. "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam," Energy, Elsevier, pages 447-454.
    19. Abdouli, Mohamed & Hammami, Sami, 2017. "Investigating the causality links between environmental quality, foreign direct investment and economic growth in MENA countries," International Business Review, Elsevier, pages 264-278.
    20. repec:kap:iaecre:v:21:y:2015:i:1:p:105-116 is not listed on IDEAS
    21. Kostakis, Ioannis & Lolos, Sarantis & Sardianou, Eleni, 2016. "Foreign direct investment and environmental degradation: Further evidence from Brazil and Singapore," MPRA Paper 75643, University Library of Munich, Germany.

    More about this item

    Keywords

    Foreign Direct Investment; GDP Growth; Environment;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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