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The Other Side of the Coins : The Environmental Impact of Greenfield FDI in Sub-Saharan Africa´s Pollution-Intensive Industries and the Role of Governance

Ostermeyer, Vinzent LU (2018)
Abstract
While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less estab-lished. This study tests the hypotheses that 1) FDI led to environmental deg-radation in form of increased greenhouse gas emissions during Sub-Saharan Africa´s recent growth spurt but that 2) this impact was felt to a lesser extent in countries with a higher quality of governance. The study builds its own panel dataset covering 12 countries and the years 2003 to 2012. While due to the research design no causal relationship can be determined, the study suggests that countries with a well-enforced rule of law noticed a lower in-crease of greenhouse gas emissions growth than countries where it was bad-ly... (More)
While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less estab-lished. This study tests the hypotheses that 1) FDI led to environmental deg-radation in form of increased greenhouse gas emissions during Sub-Saharan Africa´s recent growth spurt but that 2) this impact was felt to a lesser extent in countries with a higher quality of governance. The study builds its own panel dataset covering 12 countries and the years 2003 to 2012. While due to the research design no causal relationship can be determined, the study suggests that countries with a well-enforced rule of law noticed a lower in-crease of greenhouse gas emissions growth than countries where it was bad-ly enforced. A fixed-effects model indicates that this difference would have been five percentage points for a country with an average share of FDI in pollution-intensive industries. This result is robust to different specifica-tions. It carries economic significance as the study suggests several channels through which governance can mitigate the environmental impact of FDI. This study advances previous research by focusing on the role of govern-ance, pollution-intensive industries, and greenfield FDI. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Thesis
publication status
published
subject
keywords
Greenfield Foreign Direct Investments, FDI, Environmental Degradation, Pollution-Intensive Industries, Greenhouse Gases, Governance, the Rule of Law, Sub-Saharan Africa, Economic Development
pages
61 pages
language
English
LU publication?
yes
id
ea8cc082-a1e6-46b8-97d6-347c6b81e54f
date added to LUP
2018-09-20 15:03:05
date last changed
2018-11-21 21:41:44
@misc{ea8cc082-a1e6-46b8-97d6-347c6b81e54f,
  abstract     = {While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less estab-lished. This study tests the hypotheses that 1) FDI led to environmental deg-radation in form of increased greenhouse gas emissions during Sub-Saharan Africa´s recent growth spurt but that 2) this impact was felt to a lesser extent in countries with a higher quality of governance. The study builds its own panel dataset covering 12 countries and the years 2003 to 2012. While due to the research design no causal relationship can be determined, the study suggests that countries with a well-enforced rule of law noticed a lower in-crease of greenhouse gas emissions growth than countries where it was bad-ly enforced. A fixed-effects model indicates that this difference would have been five percentage points for a country with an average share of FDI in pollution-intensive industries. This result is robust to different specifica-tions. It carries economic significance as the study suggests several channels through which governance can mitigate the environmental impact of FDI. This study advances previous research by focusing on the role of govern-ance, pollution-intensive industries, and greenfield FDI.},
  author       = {Ostermeyer, Vinzent},
  language     = {eng},
  month        = {06},
  title        = {The Other Side of the Coins : The Environmental Impact of Greenfield FDI in Sub-Saharan Africa´s Pollution-Intensive Industries and the Role of Governance},
  url          = {https://lup.lub.lu.se/search/files/51509390/The_Other_Side_of_the_Coins.pdf},
  year         = {2018},
}