Investment inflows and sustainable development in a natural resource-dependent economy
In the current age of trade and financial openness, remote and poor local economies are becoming increasingly exposed to inflows of external capital. External investors - enjoying lower credit constraints than local dwellers - might play a propulsive role for local development. At the same time, inflows of external capital can produce environmental externalities which negatively affect labor productivity in local natural resource-dependent activities. In our paper, we consider a small open economy with three factors of production - labor, a renewable natural resource and physical capital- and two sectors - the “industrial sector” and the “local sector”. Physical capital is specific to the industrial sector whereas the natural resource is specific to the local sector. External investors participate in the industrial sector as long as the return on capital invested is higher than in other economies. The activity of the industrial sector generates a negative impact on the environmental resource. In this context, we assess under which conditions the coexistence of the two sectors gives rise to an increase in the welfare of the local population
|Date of creation:||Jan 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Piazza S.Francesco,7 - 53100 Siena|
Web page: http://www.deps.unisi.it/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Luiz R. de Mello Jr., 1997. "Foreign Direct Investment in Developing Countries: A Selective Survey," Studies in Economics 9701, School of Economics, University of Kent.
- Ronald Findlay, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, Oxford University Press, vol. 92(1), pages 1-16.
- Hübler, Michael & Keller, Andreas, 2010.
"Energy savings via FDI? Empirical evidence from developing countries,"
Environment and Development Economics,
Cambridge University Press, vol. 15(01), pages 59-80, February.
- Michael Hübler & Andreas Keller, 2008. "Energy Savings via FDI? Empirical Evidence from Developing Countries," Kiel Working Papers 1393, Kiel Institute for the World Economy.
- BARRIOS, Salvador & GÖRG, Holger & STROBL, Eric, .
"Explaining firms' export behaviour: R&D, spillovers and the destination market,"
CORE Discussion Papers RP
1654, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Salvador Barrios & Holger Goerg & Eric Strobl, 2003. "Explaining Firms' Export Behaviour: R&D, Spillovers and the Destination Market," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(4), pages 475-496, 09.
- Amiti, Mary & Wakelin, Katharine, 2002.
"Investment Liberalization and International Trade,"
CEPR Discussion Papers
3492, C.E.P.R. Discussion Papers.
- Lall, Sanjaya, 1978. "Transnationals, Domestic Enterprises, and Industrial Structure in Host LDCs: A Survey," Oxford Economic Papers, Oxford University Press, vol. 30(2), pages 217-48, July.
- Rossitza B. Wooster & David S. Diebel, 2010. "Productivity Spillovers from Foreign Direct Investment in Developing Countries: A Meta-Regression Analysis," Review of Development Economics, Wiley Blackwell, vol. 14(s1), pages 640-655, 08.
- Magnus Blomstrom & Jian-Ye Wang, 1989.
"Foreign Investment and Technology Transfer: A Simple Model,"
NBER Working Papers
2958, National Bureau of Economic Research, Inc.
- Wang, Jian-Ye & Blomstrom, Magnus, 1992. "Foreign investment and technology transfer : A simple model," European Economic Review, Elsevier, vol. 36(1), pages 137-155, January.
- Alguacil, M. & Cuadros, A. & Orts, V., 2011. "Inward FDI and growth: The role of macroeconomic and institutional environment," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 481-496, May.
- Brems, Hans, 1970. "A Growth Model of International Direct Investment," American Economic Review, American Economic Association, vol. 60(3), pages 320-31, June.
- Barbier, Edward B., 2010. "Poverty, development, and environment," Environment and Development Economics, Cambridge University Press, vol. 15(06), pages 635-660, December.
- Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2009.
"Distributive impact of structural change: Does environmental degradation matter?,"
Structural Change and Economic Dynamics,
Elsevier, vol. 20(4), pages 266-278, December.
- Angelo Antoci & Paolo Russu & Elisa Ticci, 2008. "Distributive impact of structural change: does environmental degradation matter?," Working Papers - Economics wp2008_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
- Kemeny, Thomas, 2010. "Does Foreign Direct Investment Drive Technological Upgrading?," World Development, Elsevier, vol. 38(11), pages 1543-1554, November.
- Markusen, James R. & Venables, Anthony J., 1999.
"Foreign direct investment as a catalyst for industrial development,"
European Economic Review,
Elsevier, vol. 43(2), pages 335-356, February.
- James R. Markusen & Anthony J. Venables, 1997. "Foreign Direct Investment as a Catalyst for Industrial Development," NBER Working Papers 6241, National Bureau of Economic Research, Inc.
- Andreas Waldkirch & Munisamy Gopinath, 2008. "Pollution Control and Foreign Direct Investment in Mexico: An Industry-Level Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 41(3), pages 289-313, November.
- Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
- Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2012. "Environmental externalities and immiserizing structural changes in an economy with heterogeneous agents," Ecological Economics, Elsevier, vol. 81(C), pages 80-91.
- Jing Lan & Makoto Kakinaka & Xianguo Huang, 2012. "Foreign Direct Investment, Human Capital and Environmental Pollution in China," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 51(2), pages 255-275, February.
- Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996.
"Foreign Direct Investment and Growth in EP and IS Countries,"
Royal Economic Society, vol. 106(434), pages 92-105, January.
- V N Balasubramanyam & M Salisu & David Sapsford., . "Foreign Direct Investment and Growth in EP and IS Countries," Working Papers ec18/94, Department of Economics, University of Lancaster.
- Magnus Blomstrom & Robert E. Lipsey & Mario Zejan, 1992. "What Explains Developing Country Growth?," NBER Working Papers 4132, National Bureau of Economic Research, Inc.
- Antoci, Angelo, 2009. "Environmental degradation as engine of undesirable economic growth via self-protection consumption choices," Ecological Economics, Elsevier, vol. 68(5), pages 1385-1397, March.
- Janeba, Eckhard, 2004. "Global corporations and local politics: income redistribution vs. FDI subsidies," Journal of Development Economics, Elsevier, vol. 74(2), pages 367-391, August.
- Ghertner, D. Asher & Fripp, Matthias, 2007. "Trading away damage: Quantifying environmental leakage through consumption-based, life-cycle analysis," Ecological Economics, Elsevier, vol. 63(2-3), pages 563-577, August.
- López, Ramón, 2010.
"Sustainable economic development: on the coexistence of resource-dependent and resource-impacting industries,"
Environment and Development Economics,
Cambridge University Press, vol. 15(06), pages 687-705, December.
- Lopez, Ramon E., 2010. "Sustainable Economic Development: On the Coexistence of Resource-Dependent and Resource-Impacting Industries," Working Papers 92390, University of Maryland, Department of Agricultural and Resource Economics.
- Antoci, Angelo & Bartolini, Stefano, 2004. "Negative externalities, defensive expenditures and labour supply in an evolutionary context," Environment and Development Economics, Cambridge University Press, vol. 9(05), pages 591-612, October.
- Li, Xiaoying & Liu, Xiaming, 2005. "Foreign Direct Investment and Economic Growth: An Increasingly Endogenous Relationship," World Development, Elsevier, vol. 33(3), pages 393-407, March.
- Chakraborty, Chandana & Nunnenkamp, Peter, 2008. "Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis," World Development, Elsevier, vol. 36(7), pages 1192-1212, July.
When requesting a correction, please mention this item's handle: RePEc:usi:wpaper:670. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fabrizio Becatti)
If references are entirely missing, you can add them using this form.