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The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia

Author

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  • Anh Hoang To

    (Vietnam—the Netherlands Economics Program, Ho Chi Minh City 700000, Vietnam)

  • Dao Thi-Thieu Ha

    (International Economics Faculty, Banking University, Ho Chi Minh City 700000, Vietnam)

  • Ha Minh Nguyen

    (Business and Economics Research Group; HCMC Open University, Ho Chi Minh City 722000, Vietnam)

  • Duc Hong Vo

    (Business and Economics Research Group; HCMC Open University, Ho Chi Minh City 722000, Vietnam)

Abstract

This study is conducted to examine the concerns of the foreign direct investment (FDI) causing environment degradation and also to test the validity of the traditional Environmental Kuznets Curve (EKC) in the context of emerging markets in the Asian region. Data of these countries from 1980–2016 are utilised. This study employs panel cointegration Fully Modified Ordinary Least Squares (FMOLS), which treats the endogeneity problem, and its estimators are adjusted for serial correlation. Moreover, this study also uses panel Dynamic Ordinary Least Squares (DOLS), which includes contemporaneous value, leads and, lags of the first difference of the regressors to correct endogeneity problems and serial correlations. Findings from this study indicate that the pollution heaven hypothesis and the EKC curve are generally valid in the region. In addition, FDI has a strong impact on the environment.

Suggested Citation

  • Anh Hoang To & Dao Thi-Thieu Ha & Ha Minh Nguyen & Duc Hong Vo, 2019. "The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia," IJERPH, MDPI, vol. 16(9), pages 1-24, May.
    • Handle: RePEc:gam:jijerp:v:16:y:2019:i:9:p:1636-:d:229990
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