What is the influence of FDI and international people flows on environment and growth in OECD countries? A panel study

Abstract

Recent years have witnessed an international increase of capital and human flows, this being accelerated by globalization. Several studies show that this phenomenon positively influences growth whilst being detrimental for the environment. This article aims to shed a light on the relationship between environment, growth and international capitalism and human flows. By making use of yearly data in a panel constructed around 36 OECD countries over the timespan 2000–2017, we run Pooled Ordinary Least Squares, Fixed Effects and Random Effects regressions with Driscoll-Kraay standard error correction, as well as the Generalized Method of Moments and the Dynamic Ordinary Least Squares, to obtain both short and long-run relationship. The main results provide evidence supporting the Environmental Kuznets Curve hypothesis in the short-run, while offering some variation in the long-run. The FDI bolster the economic growth by means of no green technologies. The international touristic demand just impacts on the growth, while the migration flows improve the environmental performance both in the short and long-run, implying that international human flows generate positive spill-over in terms of environmental behaviours and growth.