The Role of Energy Efficiency in Relationship between FDI and Economic Growth

FDI, which provides a channel for knowledge acquisition and dissemination, can therefore act as an engine of growth for the recipient economy. Furthermore, FDI tends to be less volatile than other capital flows, thereby exerting durable positive effects on growth (see, for example, Lipsey, 2000, and Reisen and Soto, 2001).The main objective of this study is to empirically examine the role of energy efficiency in relationship between FDI and economic growth. We estimate a linear dynamic panel-data model using data from Persian Gulf countries over the period 1980–2013. The results show that FDI help to increase of the region’s economic growth, as energy efficiency has improved. Porter hypothesis is valid in this region

Keywords:

Foreign Direct Investment , Environmental Policy , Economic Growth , Porter Hypothesis and Gulf Persian Region