After conducting the White test for OLS (Ordinary Least Squares), the Breusch-Pagan Lagrangian test for
REM (Random Effects
Model), and the Wald test for FEM (Fixed Effects Model), we find that all models suffer from heteroskedasticity. /hɛtəɹoʊˌskɪdæs
ˈtɪsɪti/
To address this issue, we choose FGLS as it is proven to be more efficient than OLS, FEM, and REM
In terms of social sustainability goals, we have found some notable results.
Expected 345 (+)
Result 35 (+)
+ The hypotheses for SDG 3 and SDG 5 are accepted. Regarding SDG 3, this result aligns with existing studies that have proved that
when people have higher incomes, they can afford better healthcare, nutrition, and living conditions, which are crucial for improving
public health. Moreover, the result for SDG5 aligns with the "social demonstration effect," where the presence of foreign firms can
introduce norms and practices that promote female entrepreneurship, thereby potentially contributing to gender equality
+ FDI does not show a significant impact in either sample, likely because education outcomes take years to develop. The study period
(2015–2022) may be too short compared to earlier studies covering 15+ years. Thus, the lack of immediate effects doesn’t mean FDI
has no role in supporting SDG 4—it may just take longer to appear.
With regard to Economic sustainability goals, we have found some notable results
Expected 789 (+)
Result 7 (+)
8 9 (-)
+ The hypothesis of SDG 7 is in line with our expectations. Some previous studies have shown that foreign-owned enterprises bring
with them more modern technologies in renewable energy production (e.g., solar, wind, and energy storage), contributing to
improved efficiency and reduced environmental impact.
+ However, the results of SDGs 8 and 9 contradict our expectations. In terms of SDG 8, this can be explained by the “resource
exploitation” effect of FDI. FDI in extractive industries, such as mining and oil, can lead to resource exploitation, which can have
negative long-term effects on economic
growth.
Regarding SDG 9, this result can be explained by the crowding-out effect of FDI. The crowding-out effect occurs when FDI displaces
domestic firms by competing for
scarce resources such as labor, capital, and market share.
Regarding Environmental Sustainability Goals, we have found that
Expected + Result: -
+ Based on the FGLS regression results, FDI has been shown to have a negative relationship with SDG 13. These results aligned with
the Pollution Haven Hypothesis and the initial stage of the Environmental Kuznets Curve that our study hypothesizes.
+There are contrasting results between FDI and SDG 15 in including and excluding education expenditure samples. These findings are
supported by various studies showing that FDI in agriculture, mining, manufacturing, and construction sectors reduced forest cover,
leading to deforestation
Governments, especially in developing Asia, should prioritize strengthening education systems to achieve the SDGs. This includes
investing in STEM and green economy skills, while partnering with foreign investors to align training with market needs. Education
boosts human capital, drives green innovation, and supports economic growth. Green education also reduces environmental impacts
and promotes sustainability, improving health, learning, and job creation.