@article{Baek:6508, recid = {6508}, author = {Baek, Jungho and Koo, Won W.}, title = {A Dynamic Approach to the FDI-Environment Nexus: The Case of China and India}, address = {2008}, number = {382-2016-22578}, series = {Selected Paper}, pages = {32}, year = {2008}, abstract = {The cointegration analysis and a vector error-correction (VEC) model are applied to examine the short- and long-run relationships among foreign direct investment (FDI), economic growth, and the environment in China and India. The results show that FDI inflow plays a pivotal role in determining the short- and long-run movement of economic growth through capital accumulation and technical spillovers in the two countries. However, FDI inflow in both countries is found to have a detrimental effect on environmental quality in both the short- and long-run, supporting pollution haven hypothesis. Finally, it is found that, in the short-run, there exists a unidirectional causality from FDI inflow to economic growth and the environment in China and India - a change in FDI inflow causes a consequence change in environmental quality and economic growth, but the reverse does not hold.}, url = {http://ageconsearch.umn.edu/record/6508}, doi = {https://doi.org/10.22004/ag.econ.6508}, }