The Relationship between Environmental Policy and Foreign Direct Investment

Abstract

This chapter examines the problem of direct foreign investment in the context of the environmental policy of different countries of the world. Today, science has quite contradictory conclusions regarding the assessment of the effectiveness of direct foreign investments and its links with ecology. In Ukraine, direct foreign investment is largely believed to originate from offshore zones. Ukrainian companies are very often the "investors". This significantly narrows down both the innovative component of the country’s environment and the changes expected to be brought by direct foreign investment, including in terms of ecological development. Based on the data of the State Statistics Service of Ukraine, the direction of the rational policy of direct foreign investments was determined from the standpoint of identifying its connections with environmental indicators. It is empirically substantiated that the policy of regulating waste generation, the policy of spending on environmental protection, and the level of innovativeness of the country are promising. This chapter presents forecast models of the development of the areas of foreign direct investment policy formation identified in the study.