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“Technological Content and Institutional Quality of FDI: Investigating the effects on the environment in Brazil”

Author

Listed:
  • Eduardo Polloni-Silva

    (Universidade Federal de Mato Grosso do Sul)

  • Herick Fernando Moralles

    (Universidade Federal de São Carlos)

  • Rosina Moreno

    (AQR-IREA, University of Barcelona)

Abstract

Research shows that Foreign Direct Investment (FDI) can be beneficial/harmful to the host’s environment. However, the mechanisms that explain these contrasting effects are still unclear. By employing a regional dataset on FDI in the State of Sao Paulo, Brazil, this study verifies how the technological content of the FDI may impact the host region. Additionally, applying the promises from the institution-based view, the origins of FDI and the institutional quality of these home countries were included. The results reject the commonly employed ‘one size fits all’ approach towards FDI, since both high-technology and low-technology FDI can be beneficial for the host’s sustainable development. Yet, the origins of these investments matter, and receiving FDI from countries with weaker institutions can be harmful, regardless of the sector. These findings have important implications for policymakers and future research focused on emerging economies, and the promised expectations of FDI should be revisited

Suggested Citation

  • Eduardo Polloni-Silva & Herick Fernando Moralles & Rosina Moreno, 2024. "“Technological Content and Institutional Quality of FDI: Investigating the effects on the environment in Brazil”," AQR Working Papers 202410, University of Barcelona, Regional Quantitative Analysis Group, revised Mar 2025.
    • Handle: RePEc:aqr:wpaper:202410
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    File URL: https://www.ub.edu/irea/working_papers/2024/202424.pdf
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    References listed on IDEAS

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    1. Doytch, Nadia & Uctum, Merih, 2016. "Globalization and the environmental impact of sectoral FDI," Economic Systems, Elsevier, vol. 40(4), pages 582-594.
    2. Yi Feng & Zhijun Gao & Wanjun Jiang, 2018. "What attracts China’s contracts to Latin America and the Caribbean? An empirical study of the determinants of Chinese contracts," Economic and Political Studies, Taylor & Francis Journals, vol. 6(1), pages 91-117, January.
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    Keywords

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    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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