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

Purpose: 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. Design/methodology/approach: 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. Findings: 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. Originality/value: 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.