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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 Leon LU (2018) EKHS32 20181
Department of Economic History
Abstract (Swedish)
While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less established. This study tests the hypotheses that 1) FDI led to environmental degradation 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 increase of greenhouse gas emissions growth than countries where it was badly... (More)
While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less established. This study tests the hypotheses that 1) FDI led to environmental degradation 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 increase of greenhouse gas emissions growth than countries where it was badly 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 specifications. 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 governance, pollution-intensive industries, and greenfield FDI. (Less)
Please use this url to cite or link to this publication:
author
Ostermeyer, Vinzent Leon LU
supervisor
organization
course
EKHS32 20181
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Greenfield Foreign Direct Investments, FDI, Environmental Degradation, Pollution-Intensive Industries, Greenhouse Gases, Governance, the Rule of Law, Sub-Saharan Africa, Economic Development
language
English
id
8948165
date added to LUP
2018-06-21 13:41:50
date last changed
2018-06-21 13:41:50
@misc{8948165,
  abstract     = {{While foreign direct investments (FDI) are promoted as a vehicle for economic development their environmental consequences are less established. This study tests the hypotheses that 1) FDI led to environmental degradation 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 increase of greenhouse gas emissions growth than countries where it was badly 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 specifications. 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 governance, pollution-intensive industries, and greenfield FDI.}},
  author       = {{Ostermeyer, Vinzent Leon}},
  language     = {{eng}},
  note         = {{Student Paper}},
  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}},
  year         = {{2018}},
}