The environmental impact of the FDI inflow in the “transport” sector of OECD countries

This work mainly focuses its attention on the investigation of the relationship between the Foreign Direct Investment (FDI) inflowing in the transport sector – and its connected activities of storage and communication – of OECD countries and the Carbon dioxide (CO₂) emission from sectoral fuel combustion. According to the most recent approach of analysis, the relationship is investigated in terms of technique and scale effects.  To this purpose, as many statistics as possible were gathered for the 25 years between 1981 and 2005. Due to the lack of information often encountered in consulting different databases of various international organizations, the resulting unbalanced dataset is analysed through the econometric technique of panel data. Apart from other evidence, which is also associated to the identification of a composition effect and that exerted by economic growth (this latter approached in terms of the typical approach to the Environmental Kuznets Curve - EKC) the empirical result of our analysis shows the existence of a positive linear relationship between FDI and CO₂. This would induce us to support the view generally expressed that "transport" heavily contributes to pollution. However, a better look at the quantitative aspect of the estimated coefficient of the considered relationship makes us observe a very minimal value. As a result, we would feel more induced to highlight an almost neutral role of foreign investment in the "transport" sector of OECD countries on the environment (as considered in terms of the pollutant subject of investigation) rather than as a heavy air-polluter as is generally thought.