Impact of foreign direct investment on economy, environment, technology, productivity and energy of the countries

Main Article Content

Arian Amidi
Sanil S. Hishan

Abstract

In today's world, attracting Foreign Direct Investment (FDI) is one of the essential tasks of governments. But what effect will the absorption of Foreign Direct Investment have on that society? Based on the review of 18 articles, the researcher has categorized these effects into the following 5 factors. These factors belong to Economy, Environment, Technology, Productivity, and Energy. Following the results of previous studies, the impacts of the five factors mentioned on communities in the effect of FDI are reviewed. The Boolean search methodology is chosen as the methodology, also the finding of the researcher is mentioned in the paragraphs below. FDI not only aids in the development of this industry, but it also has a substantial impact on the micro and macro levels. FDI has a favorable impact on the growth rate of per capita GDP. In addition, the African continent saw significant economic expansion. The impact of financial systems may explain why developing-country correlations are low while developed-country saving-investment correlations are strong. the impact of GDP and energy usage on Carbon dioxide emissions are significant, whereas the impact of FDI on Carbon dioxide emissions is positive but minor. Industrial SO2 emissions will increase by 0.098 percent for every 1% growth in FDI capital stock. FDI rising emissions in middle-income countries in the near term while reduces them in high-income nations. FDI from TMH areas has a substantial beneficial influence on the productivity of the wood products industry at the industrial level. On energy consumption, FDI revealed a negative scale impact, a structural effect, and a positive technical impact. In the end, the impact of foreign direct investment on worker productivity is positive. The researcher recommends that politicians make every effort to improve their country's political and judicial conditions to attract more FDI to their countries.

Article Details

How to Cite
Amidi, A., & Hishan, S. S. (2022). Impact of foreign direct investment on economy, environment, technology, productivity and energy of the countries. Journal of Management Info, 9(1), 38–47. https://doi.org/10.31580/jmi.v9i1.2475
Section
Articles

References

Doytch, N. (2020). The impact of foreign direct investment on the ecological footprints of nations. Environmental and Sustainability Indicators, 8(November), 100085. https://doi.org/10.1016/j.indic.2020.100085 DOI: https://doi.org/10.1016/j.indic.2020.100085

Gui-Diby, S. L. (2014). Impact of foreign direct investments on economic growth in Africa: Evidence from three decades of panel data analyses. Research in Economics, 68(3), 248–256. https://doi.org/10.1016/j.rie.2014.04.003 DOI: https://doi.org/10.1016/j.rie.2014.04.003

He, J. (2006). Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces. Ecological Economics, 60(1), 228–245. https://doi.org/10.1016/j.ecolecon.2005.12.008 DOI: https://doi.org/10.1016/j.ecolecon.2005.12.008

Hu, D., You, K. & Esiyok, B. (2021). Foreign direct investment among developing markets and its technological impact on host: Evidence from spatial analysis of Chinese investment in Africa. Technological Forecasting and Social Change, 166(January 2020), 120593. https://doi.org/10.1016/j.techfore.2021.120593 DOI: https://doi.org/10.1016/j.techfore.2021.120593

Kasuga, H. (2007). Evaluating the impacts of foreign direct investment, aid and saving in developing countries. Journal of International Money and Finance, 26(2), 213–228. https://doi.org/10.1016/j.jimonfin.2006.11.002 DOI: https://doi.org/10.1016/j.jimonfin.2006.11.002

Lin, B., Du, R., Dong, Z., Jin, S. & Liu, W. (2020). The impact of foreign direct investment on the productivity of the Chinese forest products industry. Forest Policy and Economics, 111(September 2019), 102035. https://doi.org/10.1016/j.forpol.2019.102035 DOI: https://doi.org/10.1016/j.forpol.2019.102035

Liu, X., Parker, D., Vaidya, K. & Wei, Y. (2001). The impact of foreign direct investment on labour productivity in the Chinese electronics industry. International Business Review, 10(4), 421–439. https://doi.org/10.1016/S0969-5931(01)00024-5 DOI: https://doi.org/10.1016/S0969-5931(01)00024-5

Marques, A. C. & Caetano, R. (2020). The impact of foreign direct investment on emission reduction targets: Evidence from high- and middle-income countries. Structural Change and Economic Dynamics, 55, 107–118. https://doi.org/10.1016/j.strueco.2020.08.005 DOI: https://doi.org/10.1016/j.strueco.2020.08.005

Nejati, M. & Bahmani, M. (2020). The economic impacts of foreign direct investment in oil and gas sector: A CGE analysis for iranian economy. Energy Strategy Reviews, 32(October 2019), 100579. https://doi.org/10.1016/j.esr.2020.100579 DOI: https://doi.org/10.1016/j.esr.2020.100579

Opoku, E. E. O. & Boachie, M. K. (2020). The environmental impact of industrialization and foreign direct investment. Energy Policy, 137(June 2019), 111178. https://doi.org/10.1016/j.enpol.2019.111178 DOI: https://doi.org/10.1016/j.enpol.2019.111178

Seker, F., Ertugrul, H. M. & Cetin, M. (2015). The impact of foreign direct investment on environmental quality: A bounds testing and causality analysis for Turkey. Renewable and Sustainable Energy Reviews, 52, 347–356. https://doi.org/10.1016/j.rser.2015.07.118 DOI: https://doi.org/10.1016/j.rser.2015.07.118

Su, Y. & Liu, Z. (2016). The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities. China Economic Review, 37, 97–109. https://doi.org/10.1016/j.chieco.2015.12.007 DOI: https://doi.org/10.1016/j.chieco.2015.12.007

Tsou, M. W., Liu, J. T., Hammitt, J. K. & Chang, C. F. (2013). The impact of foreign direct investment in China on employment adjustments in Taiwan: Evidence from matched employer-employee data. Japan and the World Economy, 25–26, 68–79. https://doi.org/10.1016/j.japwor.2013.01.007 DOI: https://doi.org/10.1016/j.japwor.2013.01.007

Waqih, M. A. U., Bhutto, N. A., Ghumro, N. H., Kumar, S. & Salam, M. A. (2019). Rising environmental degradation and impact of foreign direct investment: An empirical evidence from SAARC region. Journal of Environmental Management, 243(May), 472–480. https://doi.org/10.1016/j.jenvman.2019.05.001 DOI: https://doi.org/10.1016/j.jenvman.2019.05.001

Wang, C. & Jiayu, C. (2019). Analyzing on the Impact Mechanism of Foreign Direct Investment (FDI) to Energy Consumption. Energy Procedia, 159, 515–520. https://doi.org/10.1016/j.egypro.2018.12.006 DOI: https://doi.org/10.1016/j.egypro.2018.12.006

Wang, Y., Liao, M., Xu, L. & Malik, A. (2021). The impact of foreign direct investment on China’s carbon emissions through energy intensity and emissions trading system. Energy Economics, 97, 105212. https://doi.org/10.1016/j.eneco.2021.105212 DOI: https://doi.org/10.1016/j.eneco.2021.105212

Yu, D., Li, X., Yu, J., & Li, H. (2021). The impact of the spatial agglomeration of foreign direct investment on green total factor productivity of Chinese cities. Journal of Environmental Management, 290(April), 112666. https://doi.org/10.1016/j.jenvman.2021.112666 DOI: https://doi.org/10.1016/j.jenvman.2021.112666

Zhu, L., Gan, Q., Liu, Y. & Yan, Z. (2017). The impact of foreign direct investment on SO2 emissions in the Beijing-Tianjin-Hebei region: A spatial econometric analysis. Journal of Cleaner Production, 166, 189–196. https://doi.org/10.1016/j.jclepro.2017.08.032 DOI: https://doi.org/10.1016/j.jclepro.2017.08.032