# Impact of ESG on FDI in SAARC Nations: Dissertation Study
> An economic study on how Environmental, Social, and Governance (ESG) standards influence Foreign Direct Investment (FDI) inflows across SAARC countries.

Tags: esg, fdi, saarc-nations, economics-dissertation, sustainable-investment, foreign-direct-investment, panel-data-analysis
## Link Between ESG and FDI: Evidence from SAARC Nations
* Presenter: Gauri Gupta, B.A.(Hons) Economics

## Understanding ESG
* **Environmental:** Emissions, waste, and energy management.
* **Social:** Labor rights, human rights, and community impact.
* **Governance:** Board structure, ethics, and executive pay.

## Problem Statement & Research Gap
* Explores the 'Pollution Havens' vs 'Pollution Halos' hypotheses in developing nations.
* Identifies a lack of regional clarity regarding the causality between ESG scores and FDI in the SAARC region.
* Notes that $121 trillion in assets were committed to PRI in 2021.

## Research Objectives
* 1. Analyze the magnitude of ESG parameters on FDI inflows (2014-2024).
* 2. Investigate bidirectional relationship (Granger Causality) between FDI and ESG.
* 3. Provide a policy framework for developing nations.

## Methodology
* **Design:** Quantitative Panel Data Analysis.
* **Models:** Panel ARDL / Fixed Effects and Granger Causality Test.
* **Variables:** FDI Inflows (% of GDP) as the dependent variable; E, S, G scores, CO2 emissions, and trade openness as independent variables.

## Data Sources & Sample
* **Period:** 2014 - 2024.
* **Sources:** World Bank WDI, Environmental Performance Index (EPI), UN SDG database.
* **Sample Nations:** Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka.

## Preliminary Discussion
* Verified the Environmental Kuznets Curve (EKC): initial FDI may increase emissions, but long-term investment brings cleaner technology.
* Governance is a key predictor of FDI, outweighing pure cost advantages.
* Social parameters currently show a weaker link to FDI due to labor cost considerations.
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