2004•RePEc: Research Papers in EconomicsRequires access

FDI and Pollution: A Granger Causality Test using Panel Data

Robert F Hoffmann, Chew Ging Lee, Bala Ramasamy, Matthew C. H. Yeung

Abstract

This study reports the findings of Granger causality tests on the relationship between FDI and pollution across 112 countries over 15-28 years. Our results uncover alternative causality relationships between the two variables depending on a host country's level of development.

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Key concepts: Granger causality, Causality (physics), Foreign direct investment, Panel data, Economics, Econometrics, Test (biology), Pollution