Impact of foreign direct investment on economy, environment, technology, productivity and energy of the countries

Abstract

In today's world, attracting Foreign Direct Investment (FDI) is one of the essential tasks of governments. But what effect will the absorption of Foreign Direct Investment have on that society? Based on the review of 18 articles, the researcher has categorized these effects into the following 5 factors. These factors belong to Economy, Environment, Technology, Productivity, and Energy. Following the results of previous studies, the impacts of the five factors mentioned on communities in the effect of FDI are reviewed. The Boolean search methodology is chosen as the methodology, also the finding of the researcher is mentioned in the paragraphs below. FDI not only aids in the development of this industry, but it also has a substantial impact on the micro and macro levels. FDI has a favorable impact on the growth rate of per capita GDP. In addition, the African continent saw significant economic expansion. The impact of financial systems may explain why developing-country correlations are low while developed-country saving-investment correlations are strong. the impact of GDP and energy usage on Carbon dioxide emissions are significant, whereas the impact of FDI on Carbon dioxide emissions is positive but minor. Industrial SO2 emissions will increase by 0.098 percent for every 1% growth in FDI capital stock. FDI rising emissions in middle-income countries in the near term while reduces them in high-income nations. FDI from TMH areas has a substantial beneficial influence on the productivity of the wood products industry at the industrial level. On energy consumption, FDI revealed a negative scale impact, a structural effect, and a positive technical impact. In the end, the impact of foreign direct investment on worker productivity is positive. The researcher recommends that politicians make every effort to improve their country's political and judicial conditions to attract more FDI to their countries.