Foreign Direct Investment And The Environment: From Pollution Havens To Sustainable Development In Asean Countries
The focus of this study is to investigate the impact of environmental regulation on FDI in five selected countries in the ASEAN namely, Indonesia, Malaysia, Philippines, Singapore and Thailand for a time of 2000-2014. The dependent variable is Foreign direct investment and independent variables are Gross domestic product, Gross capital formation, Gross national income, Trade openness, CO2 emissions and Technology. This study employs Hausman specification test, Fixed Effect Robust Model and GMM Model. The empirical results show that FDI shares a positive relationship with GDP, which is in line with De Mello (1999), Lui et al (2002) and Wang (2002) who proved the link between them to be positive. Trade openness and GNI are incoherent to FDI, which is supported by the study of De Mello (1999); Borensztein, De Gregorio and Leo (1998) and Antwi et al. (2013). GCF have a positive relationship with FDI which is in line with Bloomstorm et al (1996) andAwan et al. (2014) who found the two variables to be coherent. However, CO2 emission and Technology failed to be in accordance with the expected result.