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Gyamfi, JN, 2024. The relationship between FDI and environmental policy, and their interaction effect on population health and employment in EU countries. PhD, Nottingham Trent University.
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Abstract
FDI is a significant source of economic development, but concerns about its environmental impact persist. The pollution haven hypothesis suggests that industries may relocate to areas with weaker environmental policies. This thesis examines the relationship between EU environmental policy and direct investment inflows using macroeconomic secondary data from 2003 to 2019. The research uses various empirical models, including the two-way fixed effects model, Driscoll-Kraay robust standard errors, bootstrap quantile regression, panel vector autoregression model, impulse response functions, forecast error decomposition, feasible generalised least squares method, and the fully modified ordinary least squares method. The thesis aims to provide a more comprehensive understanding of the relationship between environmental policy and FDI in 28 EU countries before January 2020.
The main findings indicated that there is a pollution haven in the relationship between EU environmental policy and GFDI, while the relationship with M&As supports the pollution halo hypothesis. Furthermore, we observed unidirectional Granger causality in the relationship between the EU environmental policy and aggregate FDI, while the relationship between environmental policy and the two FDI modes of entry is bidirectional. Hence, endogenous pollution haven was supported in the relationship between environmental policy and the two modes of entry. Implying that foreign investments influence the strictness of EU environmental policy and vice versa. Finally, the results confirm that the EU's environmental policy significantly influences the impact of the two FDI modes of entry on population health and employment. Moreover, for the highly developed 15 EU countries that joined the union earlier or by 1995, the moderation effect of environmental policy reduced the negative effects of both GFDI and M&As on employment and infant mortality while also reducing the positive effects on life expectancy from birth to total years. Furthermore, the moderation effect of environmental policy reduced the magnitude of the negative effects of both GFDI and M&As on life expectancy at birth to adult years while reducing the magnitude of the positive effects on infant mortality rate and employment for the comparatively less developed 13 EU countries that joined the union from 2004 to 2013. The policy implication is that the EU's strict environmental policy can serve as a useful mechanism to deter polluting industry while promoting population health and employment opportunities.
| Item Type: | Thesis |
|---|---|
| Creators: | Gyamfi, J.N. |
| Contributors: | Name Role NTU ID ORCID |
| Date: | September 2024 |
| Rights: | This work is the exclusive intellectual property of Joseph Nana Gyamfi. For private study or personal, non-commercial research, you may replicate up to 5% of this work. You must properly cite any use of the information in this publication, including the author's name, title, academic degree level, and page numbers. Please contact the owner(s) of the intellectual property rights for any further inquiries or requests, or if you need a larger copy. |
| Divisions: | Schools > Nottingham Business School |
| Record created by: | Jeremy Silvester |
| Date Added: | 17 Jul 2025 10:49 |
| Last Modified: | 17 Jul 2025 10:49 |
| URI: | https://irep.ntu.ac.uk/id/eprint/53974 |
https://orcid.org/0000-0001-7737-3153Actions (login required)
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