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

Author

Listed:
  • 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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    References listed on IDEAS

    as
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    4. Edward B. Barbier, 2003. "The Role of Natural Resources in Economic Development," Australian Economic Papers, Wiley Blackwell, vol. 42(2), pages 253-272, June.
    5. Bilal Mehmood & Parvez Azim & Sofia Anwar, 2013. "Economic Convergence in Context of Knowledge Economies in Asia: Instrumental Variable Estimation," Oeconomics of Knowledge, Saphira Publishing House, vol. 5(1), pages 15-28, January.
    6. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    7. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    8. Bilal Mehmood & Parvez Azim & Syed Hassan Raza & Huma Sohaib, 2014. "Labor Productivity, Demographic Traits and ICT A Demo-Tech Productivity Model for Asian Region," International Journal of Economics and Financial Issues, Econjournals, vol. 4(4), pages 773-783.
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    More about this item

    Keywords

    CO2 emissions; Foreign Direct Investment; Technological change; Energy consumption; Developing countries;

    JEL classification:

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

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