Article

FDI and Pollution: A Granger Causality Test using Panel Data

Nottingham University Business School
Journal of International Development (Impact Factor: 0.88). 03/2004; DOI: 10.1002/jid.1196
Source: RePEc

ABSTRACT This study reports the findings of Granger causality tests on the relationship between FDI and pollution across 112 countries over 15-28 years. Our results uncover alternative causality relationships between the two variables depending on a host country's level of development.

3 Bookmarks
 · 
203 Views
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This study investigates the relationship between Trade, Foreign Direct Investment (FDI) and economic growth for India over the period 1970-2007. The literature on foreign direct investment (FDI) Trade and economic growth generally points to a positive Trade and FDI-Growth relationship. However, very few studies offer direct tests of causality the three variables. In theory, economic growth may induce FDI inflow, Trade and FDI may also stimulate economic growth. This paper adds to the literature by analyzing the existence and nature of these causal relationships. The present analysis focuses on India, where growth of FDI has been the most pronounced. The Cointegration analysis suggested that there is a long-run equilibrium relationship. The results of Granger causality test showed that there is a causal relationship between the examined variables. Economic growth, trade and FDI appear to be mutually reinforcing under the open-door policy.
  • [Show abstract] [Hide abstract]
    ABSTRACT: This paper will investigate the Granger causality between outward Foreign Direct Investment (FDI) and the exports of goods and services in 11 European countries from 1996 to 2008. Using a new method to evaluate causality in a heterogeneous panel, we find that the causal relationship from FDI to exports is homogeneous among the panel. However, we find strong evidence of a heterogeneity of the causal relationship from exports to FDI in our sample.
    Economics Bulletin 01/2011; 31(4):2975-2985.
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper will investigate the Granger causality between outward Foreign Direct Investment (FDI) and the exports of goods and services in 11 European countries from 1996 to 2008. Using a new method to evaluate causality in a heterogeneous panel, we find that the causal relationship from FDI to exports is homogeneous among the panel. However, we find strong evidence of a heterogeneity of the causal relationship from exports to FDI in our sample.
    Economics Bulletin 01/2011; 31(4):2975-2985.

Robert Hoffmann