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FDI, Income, and Environmental Pollution in Indonesia

Author

Listed:
  • Ahmad Alim Bachri

    (Universitas Lambung Mangkurat, Jl. H. Hasan Basry, Banjarmasin, Indonesia)

  • Ellyn Normelani

    (Universitas Lambung Mangkurat, Jl. H. Hasan Basry, Banjarmasin, Indonesia)

Abstract

The research aimed to evaluate the association of disposable income and environmental pollution on the investments measured using FDI (Foreign Direct Investment). The research was specific to the Indonesian economy. The research was secondary quantitative and the data was accumulated from World Bank. The time frame considered for this study ranged from 1960 to 2018. For statistical analysis, descriptive statistics, stationarity testing, ARDL assessment and Granger Causality have been used. The results unveiled that both disposable income and environmental pollution are found to have significant effect on the FDI of Indonesia. Therefore, both the proposed hypotheses have been accepted. The research is limited to Indonesia and no other country has been evaluated. Therefore, in future more countries can be considered for comparative analysis. In furtherance, more factors can be considered in future that affect Indonesian FDI.

Suggested Citation

  • Ahmad Alim Bachri & Ellyn Normelani, 2020. "FDI, Income, and Environmental Pollution in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 383-389.
    • Handle: RePEc:eco:journ2:2020-06-50
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    References listed on IDEAS

    as
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    3. Mohamed Abdouli & Sami Hammami, 2017. "The Impact of FDI Inflows and Environmental Quality on Economic Growth: an Empirical Study for the MENA Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(1), pages 254-278, March.
    4. 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, vol. 51(1), pages 121-146, January.
    5. Baek, Jungho, 2016. "A new look at the FDI–income–energy–environment nexus: Dynamic panel data analysis of ASEAN," Energy Policy, Elsevier, vol. 91(C), pages 22-27.
    6. Inessa Love & Beata Javorcik & Arlan Brucal, 2017. "Pollution Haven or Halo? Evidence from Foreign Acquisitions in Indonesia," 2017 Meeting Papers 306, Society for Economic Dynamics.
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    Cited by:

    1. Kamil Sertoglu & Lucy Davou Philip & F rat Emir, 2021. "Assessing the Role of Agriculture and Energy Use on Environmental Sustainability: Evidence from RALS Cointegration Technique," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 50-59.

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    More about this item

    Keywords

    Disposable income; environmental pollution; FDI; Indonesia;
    All these keywords.

    JEL classification:

    • D00 - Microeconomics - - General - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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