AN EMPIRICAL ANALYSIS OF THE DETERMINANTS OF FOREIGN DIRECT INVESTMENT INFLOW TO G-20 COUNTRIES: A CROSS-PERIOD ANALYSIS
Keywords:
FDI Inflow,, G20 Countries,, Renewable Energy,, CO₂ Emissions,, Tourism,, Population, ARDL Approach,, Cross-Period AnalysisAbstract
This study examines the critical determinants of foreign direct investment (FDI) inflows in G20 economies, focusing on renewable energy, carbon emissions, tourism, and population growth. G20 countries collectively attract a substantial portion of global FDI due to their economic size and policy influence. Using the Auto-Regressive Distributed Lag (ARDL) model, this research conducts a cross-period analysis over two distinct timeframes, 1996– 2015 and 1994–2022, employing Zivot-Andrews (ZA) structural break unit root analysis to capture pre- and post-globalization dynamics and recent economic shifts, including the financial crisis and COVID-19 pandemic. Results reveal that renewable energy policies, tourism development, and population growth positively influence FDI inflows, while carbon emissions exhibit a limited impact. Notably, the cross-period analysis indicates consistent positive effects of renewable energy, tourism, and population across both timeframes, suggesting that these determinants hold stable importance in attracting FDI
to G20 nations. These findings suggest that sustainable energy investments, tourism sector growth, and strategic demographic policies enhance FDI appeal in G20 nations. The study provides practical insights for policymakers aiming to foster sustainable economic growth through targeted, multidimensional FDI strategies aligned with environmental and demographic goals.
