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How are FDI and green recovery related in Southeast Asian economies?

Author

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  • Thanh Quang Phung

    (National Economics University)

  • Ehsan Rasoulinezhad

    (University of Tehran)

  • Hang Luong Thi Thu

    (National Economics University)

Abstract

This study is to examine how FDI and green economic growth are related in Southeast Asian economies. It also attempts to find out the role of fiscal policy development in the relationship between FDI and green growth in the economies of the region. For this purpose, a dynamic panel threshold model is used for the data over the period 2000–2018. The main results show that FDI has a positive impact on the progress of green growth in these economies, with a stronger impact in the group of Southeast Asian economies with high fiscal development. This result confirms the pollution halo hypothesis, which states that FDI can promote green growth in a country. Aligning economic priorities to improve green fiscal policies, reforming fiscal integration programs, planning for green job creation, and implementing policies to attract FDI are recommended as important policy implications over the COVID-19 period.

Suggested Citation

  • Thanh Quang Phung & Ehsan Rasoulinezhad & Hang Luong Thi Thu, 2023. "How are FDI and green recovery related in Southeast Asian economies?," Economic Change and Restructuring, Springer, vol. 56(6), pages 3735-3755, December.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:6:d:10.1007_s10644-022-09398-0
    DOI: 10.1007/s10644-022-09398-0
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    More about this item

    Keywords

    Green recovery; Fiscal policy development; FDI; The pollution halo hypothesis; GMM approach; Southeast Asia;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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