The effects of greenfield foreign direct investment and cross‐border mergers and acquisitions on energy intensity in upper-middle income countries and low- and lower-middle income countries

Abstract

This study examines the effects of greenfield foreign direct investment (FDI) and cross‐border mergers and acquisitions (M&As) on energy intensity for a sample of 35 upper-middle-income countries (UMICs) and a sample of 49 low- and lower-middle-income countries (LLMICs). It is the first to examine the energy intensity effects of greenfield FDI and cross‐border M&As for subgroups of developing countries with different levels of income. It is also the first study of its kind to use stationary and non-stationary panel methods. The main findings are: first, both greenfield FDI and cross-border M&As have an insignificant impact on energy intensity in LLMICs, and second, while the effect of cross-border M&As on energy intensity is insignificant in UMICs, greenfield FDI exerts a negative and significant impact on energy intensity in UMICs.