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Spatial Heterogeneity In Carbon Emissions Intensity And The Role Of Foreign Direct Investment: Evidence From India’S Organized Sector Manufacturing Plants

Author

Listed:
  • BISHWANATH GOLDAR

    (Institute of Economic Growth, Delhi, India)

  • PIYALI MAJUMDER

    (Faculty of Economics and Public Policy, Indian Institute of Management, Rohtak, Haryana, India)

Abstract

The nexus between foreign direct investment (FDI) inflows and carbon dioxide (CO2) emissions intensity is studied using plant-level data from the Annual Survey of Industries for the years 2014–2015 to 2018–2019. We estimate the CO2 emissions intensity for individual manufacturing plants during the analysis period, considering the fuel mix and the share of renewable energy sources (RES) used in different regions’ power supply. The econometric results show that, after controlling for industry affiliation, the CO2 emissions intensity of manufacturing plants with FDI is significantly lower than that of domestic plants. Further, there is a positive spillover effect, i.e., plants with FDI and having relatively low CO2 emissions intensity tend to reduce the CO2 emissions intensity of the domestic plants in the same industry and region.

Suggested Citation

  • Bishwanath Goldar & Piyali Majumder, 2025. "Spatial Heterogeneity In Carbon Emissions Intensity And The Role Of Foreign Direct Investment: Evidence From India’S Organized Sector Manufacturing Plants," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 16(03), pages 1-27, August.
    • Handle: RePEc:wsi:ccexxx:v:16:y:2025:i:03:n:s2010007825500095
    DOI: 10.1142/S2010007825500095
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    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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