Could foreign direct investments be a liability in Sub Saharan Africa in terms of corruption and the environment?

University essay from Lunds universitet/Nationalekonomiska institutionen

Abstract: Abstract This paper's objective is to bring context and important findings on how foreign direct investments can impact Sub Saharan Africa. Based on previous research and theory data has been collected and gone through several econometric tests to set up two different panel datas: 1. How FDI can impact CO2 emissions. 2. How FDI can impact corruption. The method of this study is designed so the results can be reliable and trustworthy. Sub Saharan Africa is to a large extent in a developing faze with a lot of the countries being classified as developing countries. The endowments in natural resources could be of benefit in this regard. Natural resources may be an industry that helps lift the region out of poverty and keep on developing, but may also be a risk when it comes to environmental degradation. A potential interference to this is corruption, which is existent in Sub Saharan Africa. The research shows that FDI does have an effect on CO2 emissions negatively. This means that the results exhibit FDI inflows leading to CO2 emissions. The results cannot say anything about corruption since the significance was too low. The evidence backs up previous research and theories compiled in the study.

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