Foreign Direct Investment and cost of sustainable development goals : implications for FDI decision makers

Syed, ZA; Eskandari, R; Yazdifar, H

Abstract

Policy makers struggle to understand the limited impact of FDI on achieving Sustainable
Development Gaols (SDG). However, they overlook the fact that FDI like any other investment
decision is affected by the relative costs and benefits considerations. This study explores this
aspect and notes that to align and encourage FDI to be more sustainable, policy makers either
need to contribute towards these costs or provide substantial benefits. Using panel data on five
countries for 19 years, this study finds that costs of implementing SDG act as detriment to FDI;
therefore, if the countries can develop the infrastructure themselves or help foreign investors to
do so; then the trend may be reversed. Secondly, this study also finds the existence of pollution
haven hypothesis in developed trading economies. Thirdly, it identifies a worrying trend that
exhibits negative relationship between educational parity and FDI. This indicates that FDI
decision makers view female workforce as a cheap source of labor and are not inclined to incur
higher labour costs by paying females equal to men, even if they are equally competent and
educated. Therefore, this study recommends having a global regulatory regime to ensure that
FDI brings in the wage equality.

• Presentation Conference Type: Conference Paper (published)
• Conference Name: 17th Annual World Congress of the Academy for Global Business Advancement (AGBA)
• Start Date: Aug 2, 2021
• End Date: Aug 4, 2021
• Acceptance Date: Aug 1, 2021
• Online Publication Date: Aug 4, 2021
• Publication Date: Aug 4, 2021
• Deposit Date: May 25, 2022
• Volume: 17
• Publisher URL: http://agba.us/publications.html#
• Related Public URLs: http://www.agba.us/pdf/2021-AGBA-Book-of-Abstracts.pdf; http://agba.us/
• Additional Information: Event Type : Conference