Sectoral Foreign Investment and Nitrous Oxide Emissions: A Quantitative Investigation

Abstract

Studies of the anthropogenic contributors to greenhouse gas emissions have increased markedly in recent years. However, not all greenhouse gases have received their deserved attention. This study tests the theoretically derived assertion that foreign investment dependence increases the emissions of one such neglected greenhouse gas, nitrous oxide. Findings of the cross-national ordinary least squares (OLS) regression analysis of 44 countries show that foreign investment dependence is associated with higher levels of nitrous oxide emissions. However, the findings are contingent upon the sector of investment. That is, primary-sector investment is associated with higher levels of emissions, whereas secondary-sector investment is not. The findings support the theory of foreign investment dependence while also underscoring the need to study these sorts of structural relationships at the sector level.