Maryam ASGHARI - PH.D in Environmental Economics and International Trade

FDI has been shown to play an important role in raising a country’s technological level. Technology is spread to the host countries through FDI in diverse ways,depending on several factors that differ from company to company and from country to country. The developed countries have an enormous potential to influence the economic and ecological performance in developing countries, not only directly by using modern and environmentally friendly technologies, but alsoindirectly by reducing energy intensity. It is presumed that domestic firms benefit from the externalities associated with the foreign investment through productivity improvement, exports and international integration (Costa and de Queiroz, 2002).But the preferred mode of technology transfer is through FDI since it can internalise the transfer of superior technological assets at energy intensity reduction(Caves, 1996). Therefore, many countries offer various kinds of incentives like energy intensity reduction to attract foreign investors. The main objective of thisstudy is to empirically examine FDI inflow effect on energy intensity and the technology spillover effects of FDI inflow in energy saving of the Persian Gulf region.The results indicate that FDI inflow increase energy use, but the technology transfer effects due to FDI inflow help to energy saving in the Persian Gulf region.

Foreign Direct Investment (FDI), Energy Saving, Technology Transfer, Persian Gulf Region