Nexus between Foreign Direct Investment, Energy Consumption, Natural Resource, and Economic Growth in Latin American Countries

Authors

  • Muhammad Zeeshan Liaoning Technical University
  • Jiabin Han College of Business Administration, Liaoning Technical University, Liaoning province, XingCheng, 125105, China,
  • Alam Rehman Faculty of Management Sciences, National University of Modern Languages; Pakistan
  • Hazrat Bilal Assistant professor Center for Management and Commerce university of Swat
  • Naveed Farooq Abdul Wali Khan University Mardan, Pakistan
  • Muhammad Waseem Assistant Professor Department of Management Sciences, Hazara University Mansehra, Pakistan
  • Arif Hussain Assistant Professor Department of Management Sciences Abdul Wali Khan University Mardan
  • Muhammad Khan Lecturer Abdual Wali Khan University Mardan
  • Ilyas Ahmad Assistant professor university of Education, Jauharabad Campus, Pakistan

Abstract

Most of the Latin American Countries have witnessed high economic growth in the last few decades. FDI is a key factor in achieving the exponential economic prosperity in these countries. Besides, the positive effect on Economic growth, it also contributes to energy consumption and helps in the extraction of natural resources to the host country. This study examines the nexus between FDI, energy consumption, natural resource, and economic growth in Latin American countries for the period of 1990 to 2018. We apply Structural Equation Modelling approach to examine the relationship among these variables. The empirical results suggest that FDI, Energy consumption and Natural resources have significant and positive association with Economic growth in Latin American countries. Likewise, FDI and Energy consumption also show positive and significant effect on Natural resource, while FDI show a positive and statistically significant effect on Energy consumption. The results imply that to fuel the fast-paced economic growth, the respective governments in these countries need to reform their energy sectors by tapping renewable energy resources and deploy green technologies with a view to avoid environmental degradation. In addition, respective government in this region should formulate robust business strategies and environment to encourage FDI inflow. 

Keywords: FDI, Energy Consumption Natural, Resource, Economic development Latin American Countries

JEL Classifications: Q1, Q2, Q3, O13

DOI: https://doi.org/10.32479/ijeep.10255

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Author Biography

Muhammad Zeeshan, Liaoning Technical University

College of Business administration

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Published

2020-12-01

How to Cite

Zeeshan, M., Han, J., Rehman, A., Bilal, H., Farooq, N., Waseem, M., Hussain, A., Khan, M., & Ahmad, I. (2020). Nexus between Foreign Direct Investment, Energy Consumption, Natural Resource, and Economic Growth in Latin American Countries. International Journal of Energy Economics and Policy, 11(1), 407–416. Retrieved from http://econjournals.com/index.php/ijeep/article/view/10255

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