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The Impact Of FDI Inflow On The Environment: A Case Of The Baltic-Black Sea Region Countries

Journal: SocioEconomic Challenges (SEC) (Vol.4, No. 4)

Publication Date:

Authors : ;

Page : 151-159

Keywords : country investment potential; environment; foreign direct investment; greenhouse gas emission; national economy;

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The article summarizes the arguments within the scientific challenge on improving approaches to estimate the environmental impact of FDI inflow on the economy. The main objective of the research is to systematize the existing statistical approaches to analyze whether and how the macroeconomic determinants could impact the environment in terms of greenhouse gas emission. Systematization of theoretical and methodological materials on solving the problem of choice of applying more or less stringent environmental regulations with addition to more efficient industrial technologies which are supposed to have a positive impact on the environment. The relevance of solving this problem is that inceptive of FDI inflow could provide the economy with resources which reduce pollution, create better conditions for workers and local citizens. On the other hand, FDI are not interested in investing in economies with strict environmental legislation. The methodical tools of the research are carried out in the following logical sequence: systematization of existing statistical methods panel data analysis; analysis of data that will be used in the estimation model and in further country environmental policy making process; application of fixed and random effects models in estimation of the environmental impact of FDI on analyzed data. The research methods combine in following dimensions: comparative analysis, regression analysis. The period from 1999 to 2018 was chosen as the research period. The objects of the research are foreign direct investment net inflows into the Baltic-Black Sea region countries` economies and their impact on its environment. The article presents the results of empirical analysis, which showed that FDI inflow has an impact on the environment, but it is severely limited by other more significant determinants. The pollution haven hypothesis in the Baltic-Black Sea trans-national region countries policy in attraction FDI has not been proved considering more strict high-standard environmental legislation in EU countries alongside with increase in GHG emission per capita. The results of the research can be useful within government policy making processes considering the aim to incentivize FDI inflow.

Last modified: 2021-01-12 00:49:58