TY - JOUR
T1 - The role of FDI and energy intensity upon the consolidation of circular economies among the European Union
AU - Soto, Gonzalo Hernández
N1 - Publisher Copyright:
© 2024 Elsevier Ltd
PY - 2025/1
Y1 - 2025/1
N2 - This manuscript critically examines the intricate interplay between diverse foreign direct investment (FDI) flows, energy intensity, and their consequential effects on circular economies (CEs), specifically in terms of the waste recycling ratio, within the member states of the European Union over the period spanning from 2000 to 2021. Our findings substantiate that inflows and outflows of FDI have different implications for waste recycling, where an increase of 1% OFDI implies an increase of recycling ratio by 0.03%, a relationship that is potentially contingent upon the inherent characteristics of the flow itself in relation to its contributions to local productivity dynamics. In this vein, the influx of FDI, which is associated with amplified capital inputs and heightened productivity levels, is observed to exert a dampening effect on recycling capabilities, by an average of 0.01% for every 1% change. Conversely, the outflow of FDI entails reduced capital inputs, thereby curbing waste generation resulting from enhanced productivity capacities. Moreover, diminished energy intensity exerts a positive influence on the recycling ratio, thereby fostering the advancement of CE. To capitalize on their locational advantages, it is recommended that the European Union proactively foster the development of specialized zones that concentrate inflows of FDI, thereby facilitating the logistical complexities associated with waste recycling arising from FDI-driven productive activities. Such strategic initiatives hold the potential to contribute to heightened resource efficiency within the broader productivity relationship.
AB - This manuscript critically examines the intricate interplay between diverse foreign direct investment (FDI) flows, energy intensity, and their consequential effects on circular economies (CEs), specifically in terms of the waste recycling ratio, within the member states of the European Union over the period spanning from 2000 to 2021. Our findings substantiate that inflows and outflows of FDI have different implications for waste recycling, where an increase of 1% OFDI implies an increase of recycling ratio by 0.03%, a relationship that is potentially contingent upon the inherent characteristics of the flow itself in relation to its contributions to local productivity dynamics. In this vein, the influx of FDI, which is associated with amplified capital inputs and heightened productivity levels, is observed to exert a dampening effect on recycling capabilities, by an average of 0.01% for every 1% change. Conversely, the outflow of FDI entails reduced capital inputs, thereby curbing waste generation resulting from enhanced productivity capacities. Moreover, diminished energy intensity exerts a positive influence on the recycling ratio, thereby fostering the advancement of CE. To capitalize on their locational advantages, it is recommended that the European Union proactively foster the development of specialized zones that concentrate inflows of FDI, thereby facilitating the logistical complexities associated with waste recycling arising from FDI-driven productive activities. Such strategic initiatives hold the potential to contribute to heightened resource efficiency within the broader productivity relationship.
KW - Circular economy
KW - Energy intensity
KW - Inward FDI
KW - Outward FDI
KW - Waste management
UR - http://www.scopus.com/inward/record.url?scp=85212815955&partnerID=8YFLogxK
U2 - 10.1016/j.jenvman.2024.123806
DO - 10.1016/j.jenvman.2024.123806
M3 - Article
AN - SCOPUS:85212815955
SN - 0301-4797
VL - 373
JO - Journal of Environmental Management
JF - Journal of Environmental Management
M1 - 123806
ER -