Does foreign capital dependence affect carbon dioxide emissions in less‐developed countries? A cross‐national analysis, 1980–2014

Abstract

AbstractObjectiveI estimate the effect of foreign investment dependence on carbon dioxide emissions in developing countries with methods and data that address the numerous limitations of previous research on the same topic.MethodsI use fixed effects panel regression models that account for first‐order autocorrelation with a sample of 109 developing countries from 1980–2014.ResultsI find that foreign capital dependence is positively associated with carbon dioxide emissions. I also find economic development, total population, urbanization, and export intensity are positively associated with carbon dioxide emissions, while domestic investment is inversely associated with carbon dioxide emissions.ConclusionThis analysis provides even stronger empirical support for the ecostructural theory of foreign capital dependence than previous research on the same topic.