Foreign Direct Investment and the Environment: A Cross‐National Analysis of Carbon Dioxide Emissions Per Capita, 1980–2018¹

Abstract

Social scientists have long debated the environmental impacts of foreign direct investment (FDI). This research empirically evaluates the competing theoretical expectations of neoclassical economic theory and FDI dependency theory regarding the FDI and carbon dioxide emissions per capita relationship. Results from fixed effects panel regression models indicate that inward FDI stocks in all economic sectors exert a beneficial effect on carbon dioxide emissions per capita in analyses of developed countries, developing countries, and in a global sample of countries. I thus consistently find empirical support for neoclassical economic theory. This research contributes to an emerging body of scholarship finding that foreign capital penetration-in some cases-produces beneficial effects. KEYWORDS: environment; foreign direct investment; global and transnational sociology; greenhouse gas emissions; neoclassical and dependency theories.1 I thank editor Karen A. Cerulo and the three anonymous reviewers for helpful comments to sharpen the manuscript.

Explaining Global Inequities in Measles Vaccination Rates

“…Dixon and Boswell 1996a;Bradshaw et al 1993;Bradshaw and Huang 1991), I posit that longstanding scholarly conversations regarding the impacts of international economic dependence would benefit from investigating the impacts of debt dependence in addition to foreign investment dependence. Especially with more recent studies finding that foreign direct investment may exert beneficial effects (Clark and Kentor 2022;Sommer 2022;Mejia 2022c), it could be that debt dependence is what exerts harmful effects on development outcomes in the contemporary global economy.…”

“…The foreign direct investment dependence and measles vaccination rates relationship has not received much theoretical or empirical attention, but this international economic dependence measure is arguably the most debated (e.g. Chase-Dunn 1975;Bornschier and Chase-Dunn 1985;Firebaugh 1992Firebaugh , 1996Boswell 1996a, 1996b;Kentor 1998Kentor , 2001Grimes and Kentor 2003;Long et al 2017;Jorgenson, Dick, and Mahutga 2007;Kentor and Boswell 2003;Wimberley 1990;Shandra et al 2004Shandra et al , 2005Mahutga and Bandelj 2008;Sanderson and Kentor 2009;Clark and Cason 2015;Clark and Kwon 2018;Clark and Kentor 2022;Jorgenson et al 2022;Mejia 2021aMejia , 2021cMejia , 2022bMejia , 2022c. In other words, foreign investment dependence has often been the focus of cross-national studies, especially in those seeking to explain the "development of underdevelopment" in less-developed countries.…”

Global inequities in the prevalence of undernourishment

“…This is a commonly used measure of domestic investment in the comparative international social sciences (Mejia 2021c(Mejia , 2022b. Inward FDI stocks as a percentage of GDP are included in the analysis, which is one of the most common ways of measuring foreign capital penetration in the comparative international social sciences (Clark and Cason 2015;Clark and Kentor 2022;Kentor and Boswell 2003;Mejia 2021aMejia , 2022cMejia , 2022d. This variable is log-transformed to account for excessive skew and refers to the extent foreign investors dominate a host country's economy Kentor and Boswell 2003).…”

Government revenue composition and forest loss: A cross‐national study of low‐ and middle‐income nations

“…The data come fromSmith and Wiest (2005). The coefficients do not reach a level of statistical significance.2 We include the natural log of stocks of foreign direct investment as a percentage of gross domestic product (seeMejia 2022Mejia , 2021. The coefficient for this variable does not reach a level of statistical significance.3 We find that democracy does not explain significant variation in forest loss.…”