Towards environmental impact of inward foreign direct investment: the moderating role of varieties of democracy

IF 2.2 4区管理学 Q3 BUSINESS

Multinational Business Review Pub Date : 2024-08-08 DOI:10.1108/mbr-01-2024-0008

João Bento, Miguel Torres

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Abstract

Purpose This paper aims to clarify the relationship between foreign direct investment (FDI), democracy and carbon intensity. This study examines the influence of types of democracy on the relationship between inward FDI and carbon intensity. For this purpose, it uses five varieties of democracy, including a composite democracy indicator as moderating variables. Design/methodology/approach This study applies the fixed-effects panel quantile regression approach that considers unobserved heterogeneity and distributional heterogeneity using panel data from 160 countries during 1990–2020. By taking into account sudden changes in the volume of inward FDI, an event study is conducted across various sub-samples of democracy to check the robustness of the results. Findings The results show that FDI has a significantly negative impact on carbon intensity of the host country in the upper quantiles. In general, different types of democracy have a significant positive impact on carbon intensity across different quantiles. After considering the other factors, including industry intensity, trade openness, green technology, fossil fuel dependency and International Environmental Agreements, there is evidence that all types of democracy moderate the relationship between FDI and carbon intensity, thereby supporting the halo effect hypothesis. In addition, the interaction effects have a significant negative impact on carbon intensity of low- and high-carbon-intensive countries. Originality/value This paper offers several contributions to the literature on the effect of FDI and democracy on carbon intensity. This study overcomes the limitations related to the conceptualization and measurement of democracy found in the literature. While prior research has predominately concentrated on how democracy promotes the selection of FDI host-country locations, this study seeks to answer the question of whether democracy type has any effect on inward FDI, thus contributing to improving carbon intensity. Furthermore, this paper analyses the interaction effect on carbon intensity in different countries with different carbon intensity levels separately.

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外来直接投资对环境的影响：各种民主的调节作用

目的本文旨在阐明外国直接投资（FDI）、民主与碳强度之间的关系。本研究探讨了民主类型对外商直接投资与碳强度之间关系的影响。设计/方法/途径本研究采用固定效应面板量子回归方法，使用 1990-2020 年间 160 个国家的面板数据，考虑了非观测异质性和分布异质性。考虑到外来直接投资数量的突然变化，对不同的民主子样本进行了事件研究，以检验结果的稳健性。总体而言，不同的民主类型对不同数量级的碳强度有显著的正向影响。在考虑了其他因素（包括产业密集度、贸易开放度、绿色技术、化石燃料依赖度和国际环境协定）后，有证据表明所有民主类型都会缓和外国直接投资与碳强度之间的关系，从而支持晕轮效应假说。此外，交互效应对低碳密集型国家和高碳密集型国家的碳强度具有显著的负面影响。原创性/价值本文为有关外国直接投资和民主对碳强度影响的文献做出了多项贡献。本研究克服了文献中与民主的概念化和测量有关的局限性。以往的研究主要集中于民主如何促进外国直接投资东道国的选择，而本研究则试图回答民主类型是否会影响外来直接投资，从而有助于改善碳强度。此外，本文还分别分析了不同国家不同碳强度水平对碳强度的交互影响。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Multinational Business Review BUSINESS-

CiteScore

5.40

自引率

14.80%

发文量

期刊介绍： Multinational Business Review publishes high quality and innovative peer-review research on the strategy, organization and performance of multinational enterprise (MNE), international business history, geography of international business, and the impact of international business on economic growth and development. The journal encourages papers that are cross-disciplinary in nature, and that address new and important issues in international business. Multinational Business Review also promotes research on under-represented regions such as Africa, Central and Eastern Europe, Latin America, and South East Asia and their MNEs, as well as under-studied topics such as the role of trade, investment and other public policies. Specific topics of interest include innovation and entrepreneurship in an international context; corporate governance and ownership; social, environmental and political risk; the role of multilateral institutions; and the nature of emerging market multinationals. The title seeks strong conceptual studies, contributing to the advancement of theories and frameworks, and sound empirical work, whether qualitative or quantitative, suggesting managerial, economic or government policy recommendations. The journal encourages replication studies that contribute to our understanding of the reliability and validity of current knowledge. Finally, Multinational Business Review welcomes proposals for perspectives pieces that offer critical and challenging viewpoints; surveys of the literature particularly those that use new and innovative bibliometric methods; and special issues on topics of relevance to Multinational Business Review.