| المستخلص: |
The relationship between direct foreign investment and environmental pollution is viewed by two main schools of thought. The first approach suggests that there is a positive correlation between them, as direct foreign investment contributes to the increase of environmental pollution and thus has a negative impact on sustainable development. The second approach sees that there is a negative correlation between them, and hence, direct foreign investment has a positive impact on sustainable development. Applied studies have shown conflicting results regarding the impact of direct foreign investment on the environment in different countries. It is therefore necessary to examine the situation of each state separately. The study discusses the impact of foreign direct investment on environmental pollution applied to the Egyptian economy. Data from the time period between 1990 and 2010 in Egypt was used to test the impact of direct foreign investment on environmental pollution. Two regression coefficients were considered which linked carbon dioxide emissions as an indicator of air pollution and BOD demand as an indicator of air and water pollution (dependent variables). Inflows of foreign investment are amongst the key factors that impact environmental pollution as independent variables. Both direct effects, which result from the type of technology associated with direct foreign investment, and the indirect effects arising from increasing the size of economic activity were also tested using the same dependent variables. It was observed that inflows of direct foreign investment have a negative impact on the environment, as inflows of direct foreign investment flows contribute to the increase in levels of environmental pollution in Egypt. However, this effect arises through its indirect effects, while the direct effect contributes to reducing the levels of environmental pollution as a result of the use of clean production technologies. This means that the environmental pollution problem in Egypt is a local problem since local projects which are stimulated by the increase in foreign investment make use of high pollution production technologies, which requires the need to set strict measures to impose the use of clean production technology projects locally.
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