Open AccessForeign Direct Investment, Economic Growth, and Environmental Concern: Evidence from Nigeria
Author(s) -
Jonathan D. Danladi
Publication year - 2013
Publication title -
journal of economics and behavioral studies
Language(s) - English
Resource type - Journals
ISSN - 2220-6140
DOI - 10.22610/jebs.v5i7.420
Subject(s) - foreign direct investment , granger causality , causality (physics) , economics , multinational corporation , environmental degradation , investment (military) , international economics , environmental pollution , monetary economics , pollution , macroeconomics , environmental science , econometrics , environmental protection , ecology , physics , finance , quantum mechanics , biology , politics , political science , law
One of the reasons pointed out, as the major cause of low investment in Nigeria is low saving. To bridge the saving-investment gap, there have been calls for inflow of foreign direct investment into the country. However, there are arguments about the impacts of FDI on the host country. Principal among the various arguments is its effect on environmental degradation .This paper sets out to examine the validity of this perception using Granger causality test. It examines the direction of causality between FDI and economic growth, Economic growth and Pollution, FDI and Pollution. The results revealed that there is no causality between the growth rate of GDP and FDI, growth rate of GDP and Co 2. The only causality found is a unidirectional causality between the growths of FDI grows and the growth rate of pollution. The direction is from growth rate of FDI to the growth rate of pollution. This paper concludes that government should make policy that will ensure that multinational companies use equipment that is environmentally friendly.