1 July 2004

Foreign Direct Investment and the Environment: A Sustainable Relationship?


This paper examines the relationship of carbon dioxide emissions with various economic indicators; primary focus is given to foreign direct investment.

My study examines the impact of FDI on behaviour of less developed countries and multinational corporations.

I find that FDI affects emissions disproportionately more in poorer countries in comparison to richer countries. Allowing for exceptions, the results show the majority of developed countries are insulated from FDI influencing their emission levels significantly.