Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2022.2142638
Do stringent environmental and business regulations, and uncertainty matter for foreign direct investment inflows? Evidence from G7 and BRICS economies
Djula Borozan
Yilmaz Bayar
Marius Dan Gavriletea
Sažetak
This paper empirically evaluates the impact of environment stringency
policy, business regulations, policy and economic uncertainty,
and real GDP per capita on foreign direct investment (FDI)
inflows by employing the autoregressive distributed lag approach
and using data from 2000 to 2015. Specifically, we focus on two
groups of countries with different economic development, the
Group of Seven (G7) and the BRICS countries, and the composite
indices of business and environmental regulations and policyinduced
uncertainty, along with real gross domestic capital (GDP)
per capita, were selected to reflect the multidimensionality of the
settings in the selected countries. Our results indicate that only
the effect of real GDP per capita turned out to be homogenous
and statistically significant across different income groups and
time horizons. Findings also show that more friendly business regulations
significantly encourage FDI inflows in the long run, but
there is a bottom line. When regulations are already at a low level,
as is the case with G7 countries, further liberalization would
adversely affect FDI inflows. Furthermore, more stringent environmental
regulations have a marginally adverse effect on FDI inflows
only in the long run. At the same time, they weakly support the
pollution haven hypothesis. The impact of policy-induced uncertainty
on investment is adverse but largely nonsignificant in the
short run. It appears that cross-border investments follow a pattern
of the safe-haven effect to avoid uncertainty in the long run.
Ključne riječi
Environmental stringency policies; business regulations; policy-induced uncertainty; real GDP per capita; cross-border investment; pollution haven hypothesis; safehaven effect;
Hrčak ID:
306776
URI
Datum izdavanja:
30.4.2023.
Posjeta: 669 *