Economic Growth and Environment Nexus: The Role of Foreign Direct Investment

Mesagan, Ekundayo (2015): Economic Growth and Environment Nexus: The Role of Foreign Direct Investment. Published in: A Research Journal on Contemporary Issues and Development , Vol. 4, No. 3 (5 August 2015): pp. 44-52.

Abstract

This study focused on the role foreign direct investment plays in the relationship between quality environment and economic growth in Nigeria from 1970 to 2013. The ordinary least squares technique was employed and the key variables include carbon emission, human capital, per capita income, FDI, trade openness, interest rate, inflation rate and the interaction term between environment and FDI. The result showed that all the variables are stationary at first difference and that long run relationship exists among them. It is observed that FDI ratio and environment negatively impact GDP over the period, but the interaction between FDI and environment positively impact economic growth. It is recommended that the country should reform its environmental policies to attract proper and appropriate technology to boost its economic progress as suggested by the interaction term in the model.

• Item Type: MPRA Paper
• Language: English
• Keywords: Environment; Economic Growth; Foreign Direct Investment; Nigeria.
• Subjects: F - International Economics > F1 - Trade > F18 - Trade and Environment; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

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