The effects of FDI, ICT, CO2 emissions and financial development on economic growth: evidence from the APEC

Abstract

In the current volatile global economic context, aspects surrounding economic growth have always received much attention from researchers. Because of the importance of FDI capital, financial development, the urgent situation of the environment, the strong development of the Industrial Revolution 4.0, and the need for development policies suitable to the current situation, we conduct research on the impact of foreign direct investment (FDI), information and communication technology (ICT), financial development and CO2 emissions on economic growth. The study was carried out using the OLS regression method with data from 20 countries and territories belonging to the AsiaPacific Economic Cooperation (APEC) period 2000 - 2020. Empirical results find that Foreign Direct Investment (FDI) has a positive impact on the economic growth of developing countries, but not have an impact on the economic growth of developed countries in APEC, while the development of the information and communication technology (ICT) system has a negative effect. However, ICT has an unclear impact on the economic growth of developed countries. Besides, a country's financial development as represented by its financial liquidity index (DLIQLIA) has a negative impact on economic growth, especially for developing countries. In addition, domestic financial development is not a catalyst for FDI to have an impact on economic growth in that country. CO2 emissions have a positive impact on economic growth and have a greater impact on economic growth in developed countries than in developing countries. The results have practical implications from which to make policy proposals for economic growth, environmental protection, and effective access to technology.