FDI, GROWTH AND THE ENVIRONMENT: EVIDENCE FROM INDIA ON CO2 EMISSION DURING THE LAST TWO DECADES

This paper examines two most important benefits and costs of foreign direct investment in the Indian context - GDP growth and the environment degradation. We find a statistically significant long run positive, but marginal, impact of FDI inflow on GDP growth in India during 1980-2003. On the other hand, the long run growth impact of FDI inflow on CO2 emissions is quite large. The actual impact on the environment, however, may be larger because CO2 emission is one of the many pollutants generated by economic activities. But CO2 being a global air pollutant, our finding has some far reaching implications for the global environment as well, with India having emerged as the fourth highest in the global ranking of CO2 emissions by turn of this century.Foreign Direct Investment, GDP Growth, Environment

Relationship Between Trade, Investment and Environment: A Review of Issues

The inter-linkage between economic openness and environmental repercussions is a widely researched area. The current study contributes in the existing pool of research by conducting a cross-country empirical analysis for the year 2008 by exploring the interrelationship between openness indicators (trade and investment) and environmental performance of a country. For this purpose, the analysis separately considers export orientation, import orientation, FDI inwardness and FDI outwardness of the countries in different variations of the proposed empirical model. The regression results do not provide strong support to the Pollution Haven Hypothesis (PHH). The findings also confirm a relationship between socio-economic and socio-political factors in a country and its environmental performance