Does Foreign Direct Investment Improve Inclusive Green Growth? Empirical Evidence from China

Abstract

The main aim of the study was based on whether the foreign direct investment improves inclusive green growth in case of empirical evidence from China. In order to empirically analyse the association of FDI with the green inclusive growth, the researcher of the study has used secondary quantitative data. The data has been taken from 1981-2019 from World Bank. The IGG has been computed using Principal Component Analysis (PCA) which has been later used as the independent variable. The data has been considered of the last 30 years with annual frequency. The findings of the study revealed that in long-run, there is no relation between FDI and inclusive green growth. However, based on the short-run results, it can be evaluated that FDI and IGG are related. The paper still has some of the limitation because only China was used for the testing the variable.