This paper uses panel Granger causality tests to study the relationship between sector specific FDI and CO 2 emissions. Using a sample of 18 Latin American countries for the 1980-2007 period, we find causality running from FDI in polluting intensive industries ("the dirty sector") to CO 2 emissions per capita. This result is robust to controlling for other factors associated with CO 2 emissions and using the ratio of CO 2 emissions to GDP. For other sectors, we find no robust evidence that FDI causes CO 2 emissions.

Business cycles, Mortality rates, Developing countries, Mexico, C33, E32, I1,

No abstract

Global warming, Knightian uncertainty, Multiplicative disturbances, Pollution control, Precautionary principle, Robustness, Stochastic control, C61, E61, H21, Q28,

No abstract