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The moderating effects of FDI on the relationship between democratic institutions and CO2 emissions

Author

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  • João Bento

    (University of Aveiro)

Abstract

This study aims to examine the direct effects of foreign direct investment (FDI) on the host-country environment. More specifically, how FDI moderates the relationship between democratic institutions and anthropogenic carbon dioxide emissions in a panel of 80 democratic nations during the period 1992-2018. The author uses the System Generalized Method of Moments, first difference and system estimators, which allows for the control for present reverse causality and endogeneity in the research design. For robustness checks, I use the cross-sectional dependence and Driscoll-Kraay robust errors panel regression method. Robust evidence is found in support of the pollution halo hypothesis, in a way that carbon dioxide emissions fall. The findings suggest that FDI moderates the relationship between several varieties of democratic institutions and carbon dioxide emissions.

Suggested Citation

  • João Bento, 0000. "The moderating effects of FDI on the relationship between democratic institutions and CO2 emissions," Proceedings of Economics and Finance Conferences 14115811, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:14115811
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    References listed on IDEAS

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    More about this item

    Keywords

    FDI; Environmental impact; Anthropogenic emissions; Democratic institutions; Pollution halo; STRIPAT; GMM; Fixed effects;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • 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

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