Foreign direct investments in real estate sector and CO₂ emission : Evidence from emerging economies

In recent years, most emerging economies have experienced large foreign direct investment inflows to the real estate sector (FDIRE) and increases in carbon dioxide (CO₂) emissions. The purpose of this study is to empirically investigate the effect of FDIRE on CO₂ emissions in a set of emerging economies.

Applying fixed‐effect and generalized method of moments (GMM) techniques, this paper uses related observations from 31 emerging economies between 2000 and 2008 to analyze the impacts of FDIRE on CO₂ emissions.

The empirical results show that FDIRE does not contribute to CO₂ emissions. It is also found that energy consumption, urbanization and economic development are important determinants of CO₂ emissions in emerging economies.

While there has been a series of papers that investigated the relationship between aggregate FDI and CO₂ emissions, very few empirical studies have examined the relation between sectoral FDI and CO₂ emissions across a large number of emerging economies.