Embracing Green Foreign Direct Investment in a Journey toward Global Sustainable Economy: An Empirical Approach Using Statistical Analysis

Abstract

In particular, the link between green foreign direct investments (GFDI) and environmental performance (EP) is the focus of this study’s empirical analysis of the effects of GFDI on environmental sustainability. According to measurements like the environmental performance index (EPI) and indicators like health and ecosystem preservation (HLT and ECO), the results show that bigger GFDI sizes benefit environmental performance. Using a variety of econometric approaches, this result is derived using a worldwide sample that includes European nations from 2001 to 2023. Even after adding more explanatory factors and using a variety of econometric techniques, these results hold up well. Furthermore, the research explores the immediate and long-term impacts of GFDI on EP, emphasizing that the relationship between GFDI and EP becomes increasingly evident with time. Additionally, research will investigate how different transmission mechanisms allow green FDI to influence environmental sustainability. These results highlight how GFDI may be used to support industry environmental sustainability.