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The existing empirical literature on economic convergence and growth emphasizes the importance of foreign capital inflows for the Central, Eastern, and Southeastern European (CESEE) countries. This paper challenges such arguments by stating that not all forms of foreign capital inflows are beneficial for the economic growth of CESEE countries. Our results suggest that remittances (as an alternative foreign capital inflow) tend to slow down economic growth. Moreover, apart from the prevailing trends to investigate the economic convergence of CESEE towards Western European countries, this paper focuses on economic convergence within the CESEE region, that is, on economic convergence of the non-EU CESEE countries towards EU CESEE countries. We found that, in the last two decades, the living standard in the CESEE region has become increasingly equal. There is a tendency for poorer non-EU CESEE countries to grow faster than richer EU CESEE countries, which confirms the existence of absolute β -convergence. We have also found that each CESEE country converges 2.8% closer to its own steady state, in the sense of conditional β , every year. [ABSTRACT FROM AUTHOR]

This paper examines the impact of institutional quality on economic growth in West Africa after the Great Recession using a panel of 13 countries. In addition to the traditional institutional variables documented in the Worldwide Governance Indicators, such as government effectiveness, control of corruption, rule of law, regulatory quality, political stability, voice and accountability, and absence of violence/terrorism, the paper also derived an institutional-quality variable from the Freedom House database. To address the methodological shortcomings in the extant literature, the study used region-specific variables and adopted both the system generalized method of moments and the panel two-stage least squares estimation techniques under the framework of a cross-country growth model. The results predominantly showed a significant negative relationship between institutional quality and growth in West Africa. Specifically, corruption, government ineffectiveness, weak regulatory quality, political instability, lack of rule of law and absence of accountability were found to hinder growth in the sub-region. However, the empirical findings also showed an initial level of gross domestic product per capita, capital, labour and foreign direct investment as important drivers of growth in the sub-region. Therefore, the study concludes that the sub-region needs improved institutions that can attract higher levels of investment to promote sustained economic growth and development. [ABSTRACT FROM AUTHOR]

The twentieth issue of Financial Innovation (FIN), Volume 6, No. 2 (2020) presents six papers contributed by 15 authors and co-authors from six countries and areas: Bangladesh, Canada, India, Iran, Nigeria, and Oman. The second paper, "Impact of petroleum and non-petroleum indices on financial development in Oman", by Faris Nasif Alshubiri, Omar Ikbal Tawfik and Syed Ahsan Jamil, analyzes the impact of petroleum and non-petroleum indices on the financial development of the Sultanate of Oman from 1978 to 2017 and finds the economy of Oman is still in the first phase of economic diversification. The fourth paper, "Portfolio selection: a fuzzy-ANP approach", by Masoud Rahiminezhad Galankashi, Farimah Mokhatab Rafiei and Maryam Ghezelbash, developed specific criteria and a fuzzy analytic network process (FANP) to assess and select portfolios on the Tehran Stock Exchange (TSE). [Extracted from the article]

The spatial interaction model is an effective way to explore the geographical disparities inherent in the Belt and Road Initiative (BRI) by simulating spatial flows. The traditional gravity model implies the hypothesis of equilibrium points without any reference to when or how to achieve it. In this paper, a dynamic gravity model was established based on the Maximum Entropy (MaxEnt) theory to estimate and monitor the interconnection intensity and dynamic characters of bilateral relations. In order to detect the determinants of interconnection intensity, a Geodetector method was applied to identify and evaluate the determinants of spatial networks in five dimensions. The empirical study clearly demonstrates a heterogeneous and non-circular spatial structure. The main driving forces of spatial-temporal evolution are foreign direct investment, tourism and railway infrastructure construction, while determinants in different sub-regions show obvious spatial differentiation. Southeast Asian countries are typically multi-island area where aviation infrastructure plays a more important role. North and Central Asian countries regard oil as a pillar industry where power and port facilities have a greater impact on the interconnection. While Western Asian countries are mostly influenced by the railway infrastructure, Eastern European countries already have relatively robust infrastructure where tariff policies provide a greater impetus. [ABSTRACT FROM AUTHOR]

This paper investigates the empirical relationship between selected ease-of-doing-business indicators and foreign direct investment in sub-Saharan Africa. Using a panel of 45 sub-Saharan African countries covering the period 2004–2018 and the system generalized method of moments estimation technique, the paper reveals that ease-of-doing-business indicators play a significant role in attracting foreign direct investment to the sub-region. Specifically, a percentage point improvement in the ease of starting a business in sub-Saharan Africa results in a 0.79 percentage point increase in foreign direct investment. Moreover, a percentage point improvement in tax administration, coupled with the existence of an optimal tax rate, increases foreign direct investment inflows by 0.17 percentage point. This paper contributes to the empirical literature by proposing a new model that incorporates the quantitative effects of ease-of-doing-business indicators on foreign direct investment. These findings underscore the need for policymakers to operationalize business friendly policies that permit and promote private sector development in order to attract multinational corporations. [ABSTRACT FROM AUTHOR]

Against the increasingly serious haze pollution in China, this paper is to compare the impacts of different factors on haze pollution in different regions, and understand the causes of regional inequality of haze pollution. In doing so, quantile regression and regression-based Shapley value decomposition are employed in this paper. The main results are as follows. (1) Population density and industrialization level have positive impacts on haze pollution, while economic development negatively influences haze pollution, however, the impact of environmental regulation on haze pollution is ineffective. (2) With quantile increasing, the effect of foreign direct investment on haze pollution changes from positive to negative, and the influence of energy intensity on haze pollution changes from negative to positive. (3) The decomposition results specify that the regional inequality in population density is the main cause of the regional disparities of haze pollution. The inequalities in industrialization level and regional factors are also important reasons, and the contribution of energy intensity cannot be ignored either. The regional gap of economic development is conducive to reducing the regional disparities of haze pollution. [ABSTRACT FROM AUTHOR]

Major studies on FDI looks at location, technology, policy, availability of natural resources, skilled labor, state support, climate, political and economic advantages for investment decisions. There are few studies that look at cultural factors affecting FDI decisions in service. This paper provides qualitative analysis of the impact of national culture on the flow of foreign direct investment in the service sector within the context of Germany. In particular, the paper discusses the cultural logic of German foreign direct investment in the service sector. It argues that inward FDI in the service sector was actually substantially more affected by cultural distance compared to outward FDI. The study finds that it is important to distinguish between inward and outward FDI to assess the cultural logic of German FDI in the service sector. [ABSTRACT FROM AUTHOR]

This paper documents a non-linear impact of capital structure on the value of advertising expenditures in India during the period between 2004 and 2016. India, one of the largest emerging markets, was chosen for study because it has become an important destination for international portfolio investment. These results show that advertising expenditures incurred by firms with moderate levels of debt are more valuable than advertising expenditures incurred by firms with low or high levels of debt. Our results are robust across various proxies of capital structure and across various sub-samples. This paper argues that moderate levels of debt are associated with low agency problems, while low and high levels of debt are synonymous with high agency problems. Differences in agency problems lead to advertising expenditures that have very different levels of value-relevance. [ABSTRACT FROM AUTHOR]

The sustenance of a clean, natural, and relatively less tampered environment is one of the most important apprehensions of contemporary households, firms, and governments in the globalized world. Both developing and developed countries rely heavily on foreign direct investments (FDI) and institutional arrangements for economic prosperity and have feedback repercussions about environmental quality. Thus, the current paper attempts to explore such a triplex integrated linkage among bilateral FDI, institutional quality, and environmental quality proxied by CO2 emissions intensity on each other for 19 selected G20 countries during 2009–2017. The empirical estimation of this paper takes into account three equations that jointly address the endogeneity problem by employing both static (such as seemingly unrelated regression and three-stage least square) and dynamic simultaneous econometric techniques (such as the system generalized method of moments) with a panel dataset considering host and source countries with 342-panel pairs for the selected sample time. The empirical results confirm that bilateral FDI reduces CO2 emission intensity and strengthens the institutional quality of G20. It also supports the idea that institutional quality has a favorable and considerable impact on bilateral FDI. This paper confirms a positive and considerable feedback between environmental and institutional quality. Further, this study establishes a triplex relationship between these three factors. This study argues that governments should use incentives like tax cuts and additional subsidies to promote greener FDI in G20 nations. This is because it facilitates the employment of more modern technology and clean energy-efficient technologies to minimize emissions and spur economic growth. [ABSTRACT FROM AUTHOR]

This paper examines corporate tax avoidance involving Dutch special purpose entities (SPEs), or shell companies. We use unique data of the SPEs including the origin and destination country of dividend, interest, and royalty flows passing the Netherlands. First, we present descriptive statistics of these flows which amount to 140 billion euro in 2016. Second, we collect national tax data on the corporate income tax and fiscal treatment of these flows. By combining tax parameters with bilateral flows, we can assess the potential tax gains for multinational enterprises using Dutch SPEs. We find massive tax savings for royalties when Dutch SPEs are used as an intermediate station compared to direct flows between the origin and destination country. We measure this tax gain at almost 3 billion euro in a single year. However, we do not find such tax savings for dividends and interest. We explain where we lack information and hence cannot measure possible tax gains. In regression analysis, controlling for country characteristics, we find that tax differentials partially explain the geographical patterns of income flows diverted through the Netherlands. This paper is one of the first using bilateral income flows as dependent variables instead of FDI stocks or flows. [ABSTRACT FROM AUTHOR]

With the rapid development of China, urbanization has become an important research topic of China's CO2 emissions. To fill the gap in considering the spatial correlation of the comprehensive urbanization that includes multi-dimensional factors on CO2 emissions from urban civil buildings (UBEC), this study constructs a comprehensive evaluation indicator of urbanization from four aspects including population, economy, society, and land urbanization by using the entropy method. The spatial spillover effect of UBEC and the impact of comprehensive urbanization on UBEC are also studied by using the spatial panel model in this paper. This study finds out that UBEC has obvious spatial spillover effects. During the early years of the study period, the eastern coastal areas had greater carbon emissions, while in recent years, they have gradually transitioned to the northwestern regions. Comprehensive urbanization has a significant promotion effect on it. And foreign direct investment and per capita energy consumption also have positive impact on UBEC. This study provides a reference for measuring the effects of urbanization on sector-specific CO2 emissions and may be useful for energy efficiency and emission abatement efforts in China. [ABSTRACT FROM AUTHOR]

This paper constructs various measures of domestic and global uncertainty and provides a comprehensive study of their impacts on the Thai economy. Based on a small open economy VAR, global uncertainty delivers deeper and more long-lasting effects when compared to within-country ones. In addition, we find that uncertainty shocks first generate sudden and large declines for stock prices and foreign portfolio investment, before gradually affecting the real economy through investment and trade channels. There is also meaningful heterogeneity among different types of domestic uncertainty. While financial uncertainty matters most for the Thai economy overall, consumption demand largely responds to macroeconomic uncertainty, while economic policy and political uncertainty generates the most persistent effects on investment. Furthermore, fiscal policy uncertainty is a key driver of trade flows while monetary policy uncertainty plays an important role for capital markets. [ABSTRACT FROM AUTHOR]

Mining sector in Kosovo is of crucial importance for the economic development of the country. Since 1999, it has been considered as one of the main areas that would attract foreign investments and thus improve the economy of a young country emerging from the conflict of 1998–1999. Kosovo has in place legal and institutional framework for mining sector since 2005 but still the functionality and effectiveness remains questionable. The complex nature of the mining sector consequently involves many different laws and institutions followed by few challenges in this sector since 1999. The purpose of this paper is to outline the existing legal and institutional framework of the mining sector, focusing on the challenges involving both gaps in legislation and the implementation. The paper aims to conclude that legislative changes and improvements may be required to enable more efficient functioning of the mining sector which would have a positive impact in the attraction of foreign investments. [ABSTRACT FROM AUTHOR]

There are obvious differences between different types of environmental regulation, which are manifested in different environmental protection tendencies and goals, and there are also significant differences in policy implementation. Therefore, it is an urgent empirical problem to quantitatively evaluate the impact of heterogeneous environmental regulation on the upgrading of industrial structures. Therefore, on the basis of measuring the level of industrial structure upgrading, this paper empirically tests the impact of heterogeneous environmental regulation on industrial structure upgrading. The results show that the upgrading level of China's industrial structure increased year by year from 2000 to 2018. The three types of environmental regulatory measures have effectively promoted the upgrading of the industrial structure, and the market-incentive environmental regulation (MER) has a significantly higher role in the advancement of the industrial structure than the command-controlled environmental regulation (CER) and the voluntary public participation environmental regulation (VER). With the improvement of regional economic development level, the three types of environmental regulation have gradually become more prominent in promoting the upgrading of industrial structure. In the mechanism test, it is found that technological innovation has a partial mediating effect in the process of CER affecting the upgrading of industrial structure, MER and public VER have a complete mediating effect, while foreign direct investment (FDI) has only a partial mediating effect in the process of the three types of environmental regulation affecting industrial advancement, and there is no mediating effect in the process of influencing the rationalization of industrial structure. [ABSTRACT FROM AUTHOR]

Do investment incentives influence private firms' location decisions? Whereas prior research emphasizes tax incentives, we focus on incentives that require real-time government spending including job training and infrastructure. Real incentives influence where firms invest by resolving costly information asymmetries, and are subject to budget constraints that give rise to political targeting. This paper evaluates how real incentives shape the location decisions of foreign firms, investors who suffer from acute information asymmetries. We leverage features of the Great Recession and the 2009 American Recovery and Reinvestment Act stimulus, which temporarily increased states' fiscal capacity to fund real incentives. During the narrow stimulus spending window, states that received more federal Medicaid stimulus—instrumented with the exogenous component of the Act's funding formula—attracted more foreign direct investment (FDI) and increased state spending on real incentives. The stimulus window approximately coincides with FDI's temporary geographic expansion into US counties that lacked a history of these investments. On average, these counties had narrow vote margins in the prior gubernatorial election and garnered more state real incentive spending. These correlates are pronounced in counties with idle industrial capacity and in states whose governors sought re-election. Tax incentives had no effect on FDI. These findings have important implications for the efficacy of investment incentives and the political economy of industrial policy. [ABSTRACT FROM AUTHOR]

In the modernized world, stimulating economic growth and employment without endangering environmental sustainability remains a fundamental challenge for developing and newly industrialized economies. This current study investigates the dynamic connections between income growth, unemployment, and environmental deterioration in Turkey within the environmental Phillips and Kuznets curve frameworks. The study employs a novel econometric technique, the augmented autoregressive distributed lag (A-ARDL) model, and examines annual time-series data from 1980 to 2018. To the best of the authors' knowledge, no study has tested the validity of the environmental Phillips curve (EPC) hypothesis (a novel approach linking unemployment with environmental pollution) for Turkey. Another concern with the existing research is that only a few papers simultaneously analyze the EPC and environmental Kuznets curve (EKC) hypotheses and consider the significance of the ecological footprint. Therefore, the study utilizes ecological footprint as an environmental degradation indicator and tests these two hypotheses by setting six models that control renewable energy consumption, natural resource rents, financial development, foreign direct investments, and urbanization to provide more reliable and consistent results. Empirical evidence from the multiple models justifies the validity of both hypotheses in the short and long run. The results also suggest that natural resource rents increase the ecological footprint, while urbanization contributes to environmental quality. Nonetheless, renewable energy, foreign direct investments, and financial development have no significant environmental impact. These outcomes suggest that a rise in employment not accompanied by green energy technologies, higher environmental awareness, a well-educated labor force, and expanded renewable energy utilization may impede the country from attaining its long-term development goals. [ABSTRACT FROM AUTHOR]

This paper investigates the intricate interplay between carbon emissions and foreign direct investment within the context of Brazil, Russia, India, China, and South Africa (BRICS) for the period spanning 2000 to 2022. In our comprehensive analysis, we incorporate ecological footprint, renewable energy, globalization, and technological innovations as exogenous variables. Employing a system of simultaneous equations across the BRICS panel, we aim to fully elucidate the proposed relationships. Our empirical findings underscore the following key insights: foreign direct investment, technological innovations, and the adoption of renewable energy sources significantly contribute to the mitigation of carbon emissions in these selected nations. However, it is essential to note that ecological footprints exhibit a positive association with carbon emissions, raising concerns on two fronts: escalating environmental degradation and increased land pressure, both of which contribute to rising ecological footprints in BRICS countries. Additionally, our analysis reveals that foreign direct investment is influenced by its capacity to reduce carbon emissions and bolster renewable energy adoption, while globalization amplifies investment trends within the BRICS nations. To address the environmental repercussions of mining activities, it is imperative to implement stringent control and regulation measures, given their potential adverse impacts, including soil pollution, acid mine drainage, erosion, biodiversity loss, excessive water resource consumption, and wastewater disposal challenges. Nevertheless, proactive steps such as recycling mining waste, adopting environmentally friendly mining equipment, combatting illegal mining, and enhancing overall mining sustainability offer promising avenues to mitigate the environmental footprint of mining operations. [ABSTRACT FROM AUTHOR]

The purpose of this article is to investigate the new driving forces behind China's green energy and further assess the impact of green energy on climate change. The existing literature has used linear methods to investigate green energy, ignoring the non-linear relationships between economic variables. The nonparametric models can accurately simulate nonlinear relationships between economic variables. This paper constructs a nonparametric additive model and uses it to explore green energy. The empirical results show that the impact of green finance on green energy is more prominent in the later stage (a U-shaped impact). Fiscal decentralization also exerts a positive U-shaped impact, meaning that expanding local fiscal autonomy has contributed to green energy growth in the later stage. Similarly, the impact of oil prices and foreign direct investment demonstrates a positive U-shaped pattern. However, the nonlinear impact of environmental pressure displays an inverted U-shaped pattern. Furthermore, this article explores the impact of green energy on climate change and its impact mechanisms. The results exhibit green energy generates a positive U-shaped impact on climate change, meaning that the role of green energy in mitigating climate change gradually becomes prominent over time. Mechanism analysis exhibits that industrial structure and energy structure both produce a nonlinear influence on climate change. [ABSTRACT FROM AUTHOR]

Nowadays, concurrent attention to economic development and ecological issues is becoming an important trend. In this paper, we measure the eco-efficiency of 285 Chinese cities from 2003 to 2019 using a non-radial directional distance function and the data envelopment analysis method, based on which we analyze the club convergence of cities' eco-efficiency using the logt test; we estimate the impact of open public data platforms on eco-efficiency and its convergence using a multi-period difference in difference model and panel-ordered logit model, respectively. We find that, first, open public data platforms improve cities' eco-efficiency by about 6.5%, and the impact mechanisms include scale efficiency, technical efficiency, and total factor productivity, or, at the micro level, increasing the economic agglomeration degree, boosting the amount of foreign investment used, and increasing green innovation level. Second, there are three convergence clubs of eco-efficiency in China's cities, whose average eco-efficiency trends are above, close to, and below average, respectively. Third, public data platforms significantly increase the probability of cities belonging to the convergence clubs of high and medium eco-efficiency (Clubs 1 and 2) and decrease the probability of belonging to the low one (Club 3). However, the mechanisms only include technical efficiency and total factor productivity, or the amount of foreign investment used and the green innovation level at the micro level. [ABSTRACT FROM AUTHOR]

Historically, India has been a great investment opportunity for foreigners. However, in the last several decades, the country has experienced a substantial increase in its foreign direct investment (FDI) owing to several reforms made by the government. This study analyzes the determining factors behind Indian FDI inflows from its top source countries using the augmented gravity model. The sample period of this study ranges from 2000 to 2019, thus providing an updated analysis regarding FDI inflows. To attain the objective of this paper, we employ several econometric techniques such as Poisson pseudo maximum likelihood (PPML), feasible generalized least square (FGLS), and Newey-West standard error models. The findings show that the source country's per capita GDP is a negative determinant of FDI inflows in India from selected countries of the world. Moreover, FDI openness, gross fixed capital formation, and exports are found as the positive determinants of FDI inflows in India. The results imply that more export-oriented sectors can be identified for the selected nations, encouraging inflows. The country should look forward to incorporating new elements in old bilateral investment treaties as per the new conditions of the world economy. [ABSTRACT FROM AUTHOR]

This paper introduces a new indicator—pollution control and carbon reduction performance (PCCR) by non-radical directional distance function. We provide a solution method of DEA to measure PCCR in Chinese cities from 2006 to 2019 and study the driving factors of PCCR from both internal and external perspectives. The results are as follows. (1) PCCR has shown a stable period before 2015 and an upward period after 2015. The performance is the highest in the east, followed by the middle, and the west. Cities above sub-provincial level are generally more efficient than ordinary cities. (2) Technology-driven and efficiency-driven are key factors for improving PCCR. The importance of carbon reduction-driven is greater than that of pollution control-driven for improving PCCR. (3) Environmental Kuznets curve hypothesis is verified as there is a "U" relationship between economic development and PCCR. Industrial structure, urbanization, and fiscal expenditure promote PCCR, while foreign direct investment and human capital have no significant effect on improving PCCR. Economic growth pressure inhibits the improvement of PCCR. (4) Energy productivity, renewable energy technology, and low-carbonization of energy structure promote PCCRP, PCCRC, and PCCR. [ABSTRACT FROM AUTHOR]

Given a new perspective on the environmental hypothesis, this paper systematically investigates the validity of the environmental Kuznets curve (EKC), pollution haven, and pollution halo hypotheses using carbon efficiency as the dependent variable. Applying the dynamic autoregressive distributed lag simulations based on the annual time series data over the period 1990–2019, the study found that real GDP per capita has negative effects on China's environmental quality both in the short and long run, whereas the square of real GDP per capita has positive impacts. This validates the EKC hypothesis for China. Furthermore, foreign direct investment has negative effects on environmental quality in China, implying that the case of China exemplifies the pollution haven hypothesis and not the pollution halo hypothesis. The empirical results also demonstrate that energy efficiency and trade openness improve China's environmental quality both in the short run and long run. These findings, therefore, provide insights into achieving the ambitious climate goals in China by 2050. [ABSTRACT FROM AUTHOR]

Using a distinctive sectoral dataset from Ireland, among the most attractive destinations of Foreign Direct Investment (FDI), over the period 2000 and 2018, we evaluate the role of embodied and disembodied spillovers in labour productivity. The paper fills substantial gaps in the literature of FDI led productivity gains. First, we examine how (embodied) spillovers from different sourcing strategies of MNEs (material versus service linkages) affect the trajectory of sectoral productivity. Second, we evaluate the role of (disembodied) spillovers emerging from the intensity of foreign royalties and employee training. Third, we account in a relative manner for the absorptive capacity of domestic sectors, as a prerequisite for facilitating knowledge spillovers. Instead of purely measuring the level of human capital in the sector, we use the educational gap between domestic firms and Multi-national Enterprises (MNEs) in the same sector. After incorporating these new elements, the analysis shows that embodied spillovers through the material linkage are positively associated with domestic labour productivity (LP), nonetheless gains vary substantially across segments of the productivity distribution. The service linkage impacts negatively unless sectors get close to the educational frontier. Our results are robust for selectivity bias offering ample space for policy design and intervention. [ABSTRACT FROM AUTHOR]

This article examines the relationships between remittance and financial development (financial institutions and markets) in India and China on the availability of annual data from 1984 to 2018. Human capital formation is considered as a channel of remittances in financial development functions. Institutional quality, Economic globalization, foreign direct investment, economic growth, and government investment are included as a set of control variables in the financial development function. The results of the ARDL bounds test model indicate that remittance can positively impact financial development dynamics in both countries. While considering the human capital formation, higher levels of skilled human capital (secondary and tertiary enrolments) enhance financial development, but low-level human capital (primary enrolments) fails to do so. One contradiction found from the result is that remittance is negatively but significantly affecting financial institutions in India, and also detrimental to China's financial market. Oppositely, remittance positively impacts India's financial market and China's financial institutions. We find the varying impacts of control variables on financial development. The outcome of this paper stresses the necessity of a higher level of skilled human capital and improved institutional quality in both countries, which provides better utilization of remittances and other foreign and domestic financial flows. [ABSTRACT FROM AUTHOR]

What causes the shift in pollution burden among different high-income Belt and Road (B&R) countries? According to the pollution haven hypothesis, international trade (via Preferential Trade Agreements) and foreign direct investment are the key influencing mechanisms of international pollution burden shifting, while technological innovation and environmental provisions also have a significant impact on pollution burden transfer. The purpose of this paper is to examine how pollution burden transfer occurs in B&R countries through studying the impact of these mechanisms on the import and export of ecological footprints. The relevant evidence of pollution transfer is based on balance panel data analysis of 61 countries along B&R from 2009 to 2016. In terms of the different incomes of B&R countries, it has been found: Firstly, under the impetus of preferential trade agreements, the two-way transfer of environmental pollution burden exists in low-income and middle-income of B&R countries, and it also promotes the two-way transfer of pollution burden in middle-income countries through foreign direct investment. Secondly, the environmental provisions have no binding effect on the import and export of ecological footprint of B&R countries. Thirdly, technological innovation has negatively affected the environment of middle-income countries. These conclusions enrich the research on the transfer and influence mechanism of pollution burden among B&R countries. [ABSTRACT FROM AUTHOR]

The twenty-first century has brought in its wake a flurry of competing foreign investment players on the African investment sphere. This situation may be called the globalization of foreign investment (Bodomo 2017). Foreign investment features as a salient issue for intellectual discussions of topics such as agency, soft power, and symmetry. In this paper, we outline the important role that China and the European Union (EU), the biggest investment polities in Africa, have played in the globalization of investment in Africa and argue that China has, indeed, created a paradigm shift with respect to its investment engagement with the African continent. This paradigm shift may be calibrated in terms of the volume of engagement; in terms of the speed and efficiency with which investment projects are completed, and, in terms of the very discourse of trade and investment. The argument is advanced further by discussing some of the main features of Chinese investment that distinguish it from that of other global players on the African continent, such as Europe. We further extend arguments from our previous work (Bodomo 2017; Bodomo and Che 2020) to say that if Africa does not sharpen its agency, the end result may be that China and the EU may gain at the expense of Africa but that should Africa play a more proactive and controlling role such as enforcing its investment laws, the mid-twenty-first century may yet see a trilateral win–win-win outcome for Africa, China, and the EU. [ABSTRACT FROM AUTHOR]

Global warming is a life-threatening risk to mankind and its survival; to combat this risk, the considerable contribution of renewable energy cannot be overlooked for sustainable growth globally. The aim of this paper is to scrutinize the threshold level and asymmetric connection among renewable energy consumption, foreign direct investment, financial inclusion, and agricultural productivity in dissimilar regimes of the different income levels of 123 countries from 1995 to 2019 by applying an advance technique PSTR (panel smooth transition regression) model. The PSTR model results imply that the connection between renewable energy consumption and agricultural productivity at all the estimates is non-linear. Moreover, in all countries, there is a positive and significant connection among renewable energy consumption, foreign direct investment, financial inclusion, and agricultural productivity in both low and high regimes, except the carbon emission, which has a negative and significant impact on agricultural productivity. Based on the results of this study, the recommendations are as follows: (i) to increase renewable energy consumption, efficient-energy resources should be used by farmers for the agricultural process; (ii) the dependence on non-renewable energy resources should be minimized and shifted towards natural and renewable resources. [ABSTRACT FROM AUTHOR]

The pursuit of a green transformation agenda in China is an important aspect of achieving sustainable development. The role played by green financial development efficiency (GFDE) in this pursuit cannot be overlooked. This paper explored the impact of GFDE on China's green transformation agenda and its contributions toward sustainable development. The study adopts a systematic approach to examine the relationship between GFDE and green transformation, utilizing relevant data and literature. The study aligns with previous research in the field that highlights the importance of green finance in reducing carbon emissions and promoting sustainable development in China. It also adds to the existing literature by specifically focusing on the role of green financial development efficiency in the pursuit of a green transformation agenda in China. The study found a significant improvement in GFDE over the period of 2010 to 2020 in promoting green transformation in China. Both systems generalized method of moments and fixed-effect models revealed that trade openness, foreign investments, technological innovation, and government budget positively influenced GFDE while energy consumption and economic policy uncertainty had a significant adverse effect on GFDE. The results of this study inform policymakers and stakeholders of the importance of green finance in promoting sustainable development. The study intimated that the financial sector should provide support for green technologies and businesses by offering range of green products such as green bonds, funds, and loans. [ABSTRACT FROM AUTHOR]

Even though higher education R&D expenditures (HEEXP) are important determinants of economic growth that facilitate science, technology, new ideas, and innovation, yet its effect on environmental sustainability remains unexplored. This paper examines the nexus between HEEXP and carbon dioxide emissions (CO2e), followed by control variables such as electricity consumption (EC), foreign direct investment (FDI), gross domestic product (GDP), and total population (TP) for the period 2000Q1–2019Q4. Data were evaluated using different tests, e.g., the cross-sectional dependence test, cross-sectionally augmented Dickey-Fuller unit root test, Westerlund error-correction–based panel cointegration test, mean group, augmented mean group, common correlated effects mean group, and Dumitrescu-Hurlin panel causality test. First, the results validated the cointegration association among HEEXP, EC, FDI, GDP, TP, and CO2e. Second, the finding showed significant long-term negative nexus between HEEXP and CO2e. Third, the findings indicated that electricity consumption, foreign direct investment, gross domestic product, and total population are the important factors that intensify the overall situation of CO2e. Fourth, the results indicated that there exists bidirectional causality between EC and CO2e; FDI and CO2e; GDP and CO2e; POP and CO2e; and HEEXP and CO2e. This paper's findings call for devising policies and strengthening financial support to induce higher education for developing green patents. [ABSTRACT FROM AUTHOR]

In the course of China's rapid economic development, the coexistence of industrial development and dominant industrial agglomeration (AGG), along with growing environmental problems, has attracted widespread attention from scholars. Although the linear relationship between the two has been analyzed in depth in the research literature, a concomitant phenomenon, i.e., the gradual expansion in the scale of foreign direct investment (FDI), has been overlooked. By employing threshold panel regression model, this paper attempts to construct a theoretical model with embedded AGG and FDI, and incorporates other factors affecting environmental pollution (POL). For examining the mechanism of AGG on POL, we proposed a testable theoretical hypothesis, and conducted an empirical study by combining panel data of POL and AGG at the provincial level in China. The measurement index of a control variable was changed to check the robustness of our results, and the coefficient sign of each explanatory variable was not changed, confirming the robustness of main results. Overall, AGG improves regional POL, but the impact of FDI is stage-specific and roughly there are three stages. Specifically, the positive effect of AGG on POL is strong when FDI is at a low level. When the level of FDI crosses the first threshold and continues to rise, the positive effect of AGG on POL reaches its strongest; until the second threshold is crossed, the positive effect of AGG starts diminishing slowly. Concluding this, for promoting economic development and environmental protection in the region in parallel, government and enterprises should prioritize the increment in FDI, with an equalization of levels of AGG and FDI, in order to enhance the improvement effect of AGG on POL. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between foreign direct investment (FDI) and income distribution in the host country as measured by the Gini coefficient. After providing some background and reviewing the extant literature, it undertakes a panel unit root and cointegration analysis that tests whether FDI has a non-linear impact on income inequality in seven selected Southeast Asian countries over the period 1990 to 2013. The paper finds strong evidence for panel cointegration using the Pedroni Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. Thus, it proceeds to utilize the group-mean fully modified ordinary least squares (FMOLS) procedure to generate long-run estimates that are unbiased and consistent. The FMOLS estimator is also extremely accurate even in panels with very heterogeneous serial correlation dynamics, fixed effects, and endogenous regressors. The results confirm the hypothesis that FDI inflows tend to raise income inequality in the short run but reduce it in the long run. In this study, the Gini index starts decreasing after FDI inflows as a percentage of GDP reaches 5.6. The fact that the Gini coefficient reaches its maximum at a relatively low level of FDI inflows suggests that sample countries are endowed with substantial absorptive capacity. In other words, they will shift into the new technological paradigm quickly, thus supporting pro-globalization claims that, on balance, FDI is more beneficial than harmful. [ABSTRACT FROM AUTHOR]

Determine the main factors affecting carbon emissions of the Chinese steel industry is indispensable commitments to achieve the sustainable development of China. Hereby, based on the Stochastic Impacts by Regression on Population, Affluence and Technology (STIPRAT) model, this paper combines the economic growth function, carbon emission production function, and the FDI function of the Chinese steel industry, and uses the three-stage least square equation model (3SLS) to analyze the relationship between China's economic growth, carbon emissions in the steel industry, and FDI (foreign direct investment) inflows. The results document a complete two-way causal relationship of three variables in the whole country and the Western region, while the relationship in the Eastern region and the Central region is not complete. Moreover, there are no bidirectional causal relationship between carbon emissions and FDI in the Eastern region, while only bidirectional causality between carbon emissions and FDI in the Central region. These findings are of great significance for the Chinese steel industry to formulate effective emission reduction policies. [ABSTRACT FROM AUTHOR]

Environmental regulation is considered an important means to solve PM2.5 pollution. Based on panel data of 280 cities in China from 2003 to 2016, this paper analyzes the dual effects of environmental regulation on PM2.5 pollution, namely, the direct effect and the indirect effect by three transmission channels of the technological innovation, industrial structure, and foreign direct investment (FDI). The impact of urban heterogeneity on the effects of environmental regulation is then examined. The study found that environmental regulation has a significant negative impact on PM2.5 pollution. In addition, environmental regulation can indirectly reduce PM2.5 pollution through technological innovation and industrial structure adjustment. However, it also restrains the environmental spillover effect of FDI, in this way exacerbating PM2.5 pollution. Urban heterogeneity factors such as geographical location, city size, and resource endowment have an impact on pollution control and the haze reduction effect of environmental regulation. Finally, based on the research conclusion, some suggestions are proposed for strengthening environmental regulation and reducing PM2.5 pollution. [ABSTRACT FROM AUTHOR]

This paper exploits a panel of 28 European Union (EU) countries between 1995 and 2016 to analyze whether higher debt resulted in lower private investment – the so called debt overhang effect. We deal with the potential endogeneity between private investment and other macroeconomic determinants by applying an instrumental variable approach (GMM). Our results support the debt overhang hypothesis and indicate that this relationship only works through the public debt channel. In our baseline regression, a 10 percentage point increase in public debt reduced private investment by €18.32 billion, given the levels of private investment prevalent in 2016. By contrast, private debt does not appear to be a significant determinant of private investment. These results hold after controlling for a number of factors that might have caused public debt to increase and private investment to decrease. While our analysis focuses on the financial sector channel, we find no evidence that public debt tightens the credit constraints for private firms or worsens the public debt overhang. We also show that government bailouts of the financial sector, which could alleviate financial distress and boost credit provision, do not appear to be effective in mitigating the public debt overhang effect. Finally, we find evidence that the financial openness of a country does alleviate the negative impact of public debt on private investment. This might suggest that attracting foreign capital compensates for a contraction in the domestic pool of financial resources due to higher public debt levels. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) is known to be beneficial because of the positive externalities it generates in the recipient economy, whether in developed or developing countries. With a view to achieving the Sustainable Development Goals (SDGs), West African countries are investing in attracting foreign investors, as evidenced by the upsurge in FDI flows observed over the past two decades and the reforms and attractiveness policies put in place. In West Africa, this FDI, which is mainly directed towards the natural resource extraction sectors, has consequences for the quality of the environment. This paper focuses on analyzing the effect of FDI on environmental quality in 13 West African countries over the period 2000–2020. This research uses a panel quantile regression with nonadditive fixed effect. The main results obtained indicate a negative effect of FDI on environmental quality reflecting the existence of the pollution haven hypothesis in the area. In addition, we find evidence of the U shape of the environmental Kuznets curve (EKC), invalidating the environmental Kuznets curve (EKC) hypothesis. West African governments should implement green investment and financing strategies and encourage the use of new green technologies and clean energy to improve environmental quality. [ABSTRACT FROM AUTHOR]

The debate on the environmental effects of foreign direct investment (FDI) has long been overdue but remains inconclusive. One key reason is that existing studies have focused mainly on the linear effect of FDI, ignoring its nonlinear effect. To remedy this deficiency, this paper establishes a nonlinear theoretical framework for modeling the connection between FDI and environmental pollution. Furthermore, we develop a spatial semiparametric autoregressive two-way effect panel data model to empirically test the nonlinear impact of FDI on China's environment. The results reveal strong evidence for the positive spillover effect of pollutant emissions in the spatial distribution and an inverted "N-shaped" connection between FDI inflow and environmental pollution. The influx of FDI has been shown to positively moderate the impact of economic growth on environmental degradation. In contrast, FDI inflow has negatively mitigated the impacts of industrialization on environmental degradation. The findings also reveal that energy consumption, economic growth, industrialization, and population size exacerbate environmental pollution, while technology and urbanization do the opposite. The research results have important practical relevance for re-examining the environmental performance of FDI and formulating coherent policies for attracting investment and energy-reduction policies. [ABSTRACT FROM AUTHOR]

Sustainable development and socioeconomic growth are balanced through green economic recovery post pandemic. To statistically examine the coordinated development of green economic growth, foreign direct investment, stock market return and financial development, this paper constructs a complete indicator system for green economic recovery and financial development, by using a VAR model for the BRICS over the period of 2000–2020. Our results demonstrate that FDI significantly improves environmental quality by lowering pollution levels and improve the green economic growth in the region (BRICS). Stock market also has a significant positive effect on green economic growth. On the other side, FDI has a significant detrimental effect on financial development. Finally, financial development has a considerable detrimental impact on environmental deterioration. Our analysis recommends that besides the initiatives in financial growth, FDI and stock market be given priority in order to improve sustainable development. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between CO2 emissions, energy consumption, economic growth, and foreign direct investment for a sample of Asia-Pacific Economic Cooperation Countries (APEC) countries from 1981:Q1 to 2021:Q1 employing panel data methodology. We identify cross-sectional dependence and hence utilize the cross-sectional augmented Dickey-Fuller panel unit root test for appropriate estimation. The cointegration test developed by Westerlund (2008) reveals a long-run equilibrium between CO2 emissions, energy consumption, economic growth, and foreign direct investment. Long-run parameter estimates based on Common Correlated Effect Mean Group indicate that an increase in FDI inflows has a negative impact on air quality, supporting the pollution haven hypothesis. The cointegration test results also show that the impact of Gross Domestic Product (GDP) on CO2 emissions varies by country in the estimation sample. In contrast to the mixed evidence on the effects of other variables, the increase in energy consumption is positively and significantly affecting CO2 emissions in all APEC countries. Emirmahmutoglu and Kose Econ Model 28:870-876, (2011)'s panel causality test results show a bidirectional relationship between FDI and CO2 emissions in Japan. Furthermore, there is a bidirectional causal relationship between GDP and energy consumption in Australia, China, Japan, and Singapore. Overall, empirical evidence suggests that APEC countries should adhere to strict regulations and invest in environmental-friendly clean technologies to attract foreign direct investment. [ABSTRACT FROM AUTHOR]

This paper studies whether foreign direct investment (FDI)-CO2 emissions relationship may change depending on the data-driven estimated threshold levels for the country characteristics (CC) including human capital and governance in a sample of 13 Middle East and North Africa (MENA) economies during the 1996–2019 period. Our results strongly suggest that endogenously estimated CC thresholds matter for the impact of FDI on CO2 emissions. The pollution haven hypothesis, which maintains that FDI is associated with higher levels of pollution, appears to be valid for economies with weak CC. In addition to this, the pollution halo argument suggesting FDI lowers the emissions appears to be hold in countries with strong CC. The results in this study may indicate that policies aiming to improve human capital and governance may be expected not only to increase the economic benefits of FDI in terms of growth but also mitigate the negative environmental impacts of FDI in the MENA region. [ABSTRACT FROM AUTHOR]

The offshore floating wind-solar-aquaculture (WSA) system with its advantages such as strong seakeeping ability, considerable power generation, and full utilization of ocean space and water resources will have a bright prospect in the future. In order to accelerate the sustainable development of the energy industry, it is very important to build a reasonable investment decision-making framework. Therefore, this paper aims to build a multi-criteria group decision-making (MCGDM) framework for investment decision-making of this project. Firstly, a comprehensive criteria system has been established. Secondly, probabilistic language term sets (PLTSs) are introduced to describe the uncertainty and fuzziness of decision information. Thirdly, the expert weight determination model is established based on the correlation measure and correlation coefficient of PLTSs, and the PL-fuzzy decision-making trial and evaluation laboratory (DEMATEL) method and the information entropy method are introduced to determine the subjective and objective weights of the criteria. In addition, considering the decision maker's psychological behavior, we choose probabilistic language the interactive and multiple attribute decision-making (TODIM) method to determine the optimal investment alternative. Finally, we apply the proposed framework to a case study. The results illustrate that the alternative A3 possesses the optimal comprehensive performance with the overall value is 1. Then, we conduct sensitivity analysis and comparative analysis to verify its robustness and feasibility. Scenario analysis in TODIM method showed that it is reasonable to express decision preference by setting different recession coefficients in the actual decision-making environment. This study can provide some reference for decision-makers, and also extend the method of decision-making field. [ABSTRACT FROM AUTHOR]

Under the constraints of energy and environment, improving green economic efficiency (GEE) has become the key path to promote the sustainable economic development. Among the driving factors of GEE, the role of outward foreign direct investment (OFDI) is worth exploring. In this paper, we adopt the inter-provincial panel data of China from 2011 to 2019 and System Generalized Method of Moments (SYS-GMM) to explore the influence of OFDI on GEE. We find that OFDI significantly improves China's GEE, and reverse technology spillover through direct investment in developed countries is an important way for OFDI to promote GEE. Regional heterogeneity test shows that OFDI significantly promotes GEE in eastern China; however, the promotion effect is not significant in midwestern China. Besides, the promoting effect of OFDI on GEE has been further improved after 2016. We further adopt panel threshold model and find that when the financial development (FD) and human capital (HUM) exceeds 2.0954 and 0.0290, respectively, the promoting effects of OFDI on GEE are greatly enhanced. We suppose that the above conclusions can provide guidance for policymakers to optimize OFDI and improve GEE. [ABSTRACT FROM AUTHOR]

This paper investigates the effects of carbon emissions, renewable energy consumption, FDI, and exports on economic growth in BRICS countries from 2000 to 2018. The study uses other variables such as interest rates, labor force, trade openness, and gross domestic savings to determine the long-run relationship among variables. We employ several econometric techniques, such as ARDL, pool mean group (PMG), mean group (MG), and the Dumitrescu Hurlin panel causality tests, to draw empirical inferences. The estimation of the PMG model indicates that carbon emissions, renewable energy consumption, exports, FDI, and savings have a significant positive long-run impact on economic growth, while interest rates and trade openness affect economic growth negatively. FMOLS and DOLS results also confirm the robustness of PMG long-run results. Moreover, the Dumitrescu Hurlin panel causality results indicate a bi-directional causal relationship between carbon emissions and economic growth and between economic growth and foreign direct investment, also one-way causality from exports and labor force to economic growth. It implies that an increase in carbon emissions and FDI leads to an increase in economic growth, also increase in economic growth, the CO2 emissions and FDI increase in BRICS economies. Finally, the current study recommends a vital policy that the primary focus should target toward promoting renewable energy consumption, FDI, exports, and savings to boost economic growth in BRICS countries. [ABSTRACT FROM AUTHOR]

Building a sustainable energy system and achieving sustainable economic growth has always been China's development goal. However, under the promotion incentive and information asymmetry, local governments may choose to sacrifice the ecological environment to maintain expected economic growth goals. This paper analyzes the relationship between economic growth targets and green energy efficiency (GEE) by using panel data models and spatial econometric techniques. Moreover, the mediation effect model and threshold effect model are used to study their influence mechanism and the possible nonlinear relationship. The results indicate that economic growth targets reduce the efficiency of GEE. The impact of environmental regulation on GEE is "U" shaped. Environmental regulation plays a positive moderation role between economic growth targets and GEE. Additionally, higher levels of technological innovation, industrial upgrading, and environmental regulation result in a reduction in the negative effects of economic growth targets on the GEE. However, the improvement in the foreign direct investment can increase the negative influences of economic growth targets on the GEE. [ABSTRACT FROM AUTHOR]

This research studied the impacts of the environmental Kuznets curve and the determinants of economic growth for Visegrad countries from 1990 to 2018. This paper reflects on the effects of renewable and non-renewable energy, urban population, foreign direct investment, economic growth, and carbon dioxide emissions. According to our results, the panel of unit root tests showed that the variables under study are integrated into the first differences. Considering the empirical results for the environmental Kuznets curve, we observe that economic growth is positively correlated with pollution emissions; nevertheless, the squared income per capita is negatively impacted by carbon dioxide emissions. Energy consumption increases carbon emissions, and foreign direct investment confirms the pollution halo hypothesis. Therefore, the econometric results showed that renewable energy consumption promotes regional growth. Consequently, urban population and foreign direct investment positively correlate with economic growth. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) flows from developed to developing countries may increase carbon emissions in developing countries as developing countries are seen as pollution havens due to their lenient environmental regulations. On the other hand, FDI flows from the developed world may improve management practices and advanced technologies in developing countries, and an increase in FDI flows reduces carbon emissions. Most of the existing studies examine the relationship between FDI flows and carbon emissions by using aggregate FDI flows; however, this paper contributes to the literature by analyzing the impact of FDI flows on carbon emissions in Brazil, Russia, India, China, and South Africa (BRICS) between 1993 and 2012 using bilateral FDI flows from eleven OECD countries. According to our empirical results, from which OECD country FDI flows to BRICS countries matters for carbon emissions in BRICS countries. Our results confirm that FDI flows to BRICS countries from Denmark and the UK increase carbon emissions in BRICS countries, confirming the pollution haven hypothesis. On the other hand, FDI that flows from France, Germany, and Italy reduced carbon emissions in the BRICS countries, confirming the pollution halo effect. FDI flows from Austria, Finland, Japan, Netherlands, Portugal, and Switzerland have no significant impact on carbon emissions in BRICS countries. The BRICS countries should promote clean FDI flows by reducing environmental damages, and investing countries should be rated based on their environmental damage in the host countries. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editors discuss various reports within the issue on topics including the impact of foreign direct investment on wages in China, the correction of the U.S. external deficits, and controls of capital inflows.

Although the role that renewable energy consumption plays on economic growth and emissions has been widely studied, there are relatively few papers focusing on the determinants of renewable energy consumption, and only one study focuses on the factors related to the share of renewables in the energy consumption in Africa. This paper contributes to the literature by filling the gap in knowledge by exploring the nexus between the share of renewables in energy consumption and social and economic variables, for a panel consisting of 21 African countries for the period between 1990 and 2013, extending the set of variables and the time span used by a previous study. Estimating a random-effects generalized least squares regression, we find that countries with a higher Human Development Index and a higher gross domestic product per capita have a lower share of renewable energy in the national grid. On the other hand, an increase in foreign direct investment has been found to be related to higher renewable energy integration. The level of democracy, measured by the Freedom House political rights and civil liberties ratings, does not directly affect the integration level of renewable energy sources. The negative relationship between gross domestic product per capita and the share of renewables contradicts previous findings for developed countries. This contradiction and policy implications are discussed in the light of the review of the energy mix of the selected countries. [ABSTRACT FROM AUTHOR]

Numerous studies have been devoted to the Feldstein-Horioka puzzle. However, no consensus has been reached in the literature. This paper examines the causal relationship between domestic saving and investment rates in six transition economies (Estonia, Latvia, Lithuania, Ukraine, Belarus, and Russian Federation). Theoretically, the presence of any type of causal structure between these two series in a country implies that national capital markets are not open; hence capital flows are impeded. Therefore, the paper employs the bootstrap panel Granger causality approach that accounts for both cross-sectional dependence and slope heterogeneity across countries to determine the causal structure. The findings show that there is a causality between the series, thereby implying that capital is not perfectly mobile internationally in any of the countries under review, but it is more mobile in Estonia, Russian Federation, and Latvia than Lithuania, Belarus, and Ukraine. The underdevelopment of financial markets in these countries as well as the demand for foreign capital to finance domestic investment projects and the lack of adequate economic and financial reforms might have driven these results. [ABSTRACT FROM AUTHOR]

On the basis of previous studies on the relations among foreign direct investment (FDI), environmental regulation, and environmental pollution, this work uses provincial panel data from 2000 to 2014 to study the effects of FDI and environmental regulation on environmental pollution by applying the panel-corrected standard error (PCSE) method. This paper then utilizes environmental regulation as the threshold variable to estimate the threshold effects of environmental regulation on FDI's influence on environmental pollution in a threshold regression model for the eastern, central, and western regions of China. The results show that stricter environmental regulation can substantially reduce the pollution in each region. FDI can decrease environmental pollution in the eastern and central regions, but it can increase pollution in the western region. There are double-threshold effects of environmental regulation on the effects of FDI on environmental pollution in each region. When the environmental regulation level is between the first threshold and the second threshold, FDI can decrease environmental pollution much more in the eastern and central regions and increase environmental pollution much less in the western region. [ABSTRACT FROM AUTHOR]

In this paper, we propose a Bayesian estimation approach for a spatial autoregressive logit specification. Our approach relies on recent advances in Bayesian computing, making use of Pólya–Gamma sampling for Bayesian Markov-chain Monte Carlo algorithms. The proposed specification assumes that the involved log-odds of the model follow a spatial autoregressive process. Pólya–Gamma sampling involves a computationally efficient treatment of the spatial autoregressive logit model, allowing for extensions to the existing baseline specification in an elegant and straightforward way. In a Monte Carlo study we demonstrate that our proposed approach markedly outperforms alternative specifications in terms of parameter precision. The paper moreover illustrates the performance of the proposed spatial autoregressive logit specification using pan-European regional data on foreign direct investments. Our empirical results highlight the importance of accounting for spatial dependence when modelling European regional FDI flows. [ABSTRACT FROM AUTHOR]