OIL FDI, ENVIRONMENT AND WELFARE ISSUES: EVIDENCE FROM NIGER DELTA REGION

Kareem Dada Salami, Arogundade Samod Lawal, Kehinde Atoyebi

Abstract


The study investigates oil foreign direct investment impacts on the environment and people of Niger Delta oil producing communities, using structural equation models. Structural equation model is adopted because it accommodates multiple dependent variables simultaneously.  Evidence shows that oil foreign direct investment has greater adverse impact on the environment than improving the well-being of the people in host communities. By implication, the environment appears to be devastating at a faster rate than well-being. This suggests that the marginal environmental cost of addition exploitation will rise over time. Therefore, there are needs for efficient allocation of resources in production and consumption so as to reduce the degree of environmental degradation.

Keywords


Oil foreign direct investment, environment, well-being, structural equation modeling

Full Text:

PDF

References


Adam B. Jaffe, et al., (2014) Technological Change and the Environment. NBER Working Paper No. 7970 Issued in October 2000 NBER Program(s) http://www.nber.org/paper/w7970.pdf

Aghalino (2014) The health of Rural Inhabitants in Niger Delta Region. Journal of environment, Vol 5 pp 50-58

Akpamovie (2015) The environmental destruction in Niger Delta Region 4 (1-2): 53-89

Baumol, W. J. and Oates, (2008), The Theory of Environmental Policy (2nd edition): Cambridge University Press

Bjorvatn (2008) The theory of environmental degradation and Economic growth. Journal of environment.

Byrne, B. M. (1998) Structural Equation Modeling with LISEL, PRELIS and SIMPLIS: Basic Concepts, Applications and Programming Mahwah, New Jersey: Lawrence Erbaum Associates.

Catarina Roseta Palma, Alexandra Ferrevra and Tiago Neves Sequeira (2010), Externalities in an endogenous growth model with social and natural capital Ecological Economics 69(3): 603-612

Copeland and Taylor (2015), Transferring environmental value estimates: Issues and alternatives Commonwealth Scientific and Industrial Research Organization (CSIRO), Sustainable Ecosystems Division

Collin Price (2007), Sustainable Forest Management, Pecuniary Externalities and invisible Stakeholder, Journal of Forestry Policy and Economics Vol. 9, pp. 120-137.

Croker (1966). Economic growth and Environmental Degradation. Journal of Energy policy and environment.

Daron Acemoglu (2003) Why not a political Coase theorem? Social conflict, commitment, and politics, Journal of Comparative Economics (31) 620–652

Elif -Akbostancı, Serap Turut- Asik and G. Ipek Tunc (2009), The relationship between income and environment in Turkey: Is there an environmental Kuznets curve? Energy Policy 37 (2009): 861–867

Emeka Nkoro and Emeka Nkoro (2012). The Effect of Global Financial Crisis in Nigerian, Economy, British Journal of Economics, Finance and Management Sciences 48 October 2012, Vol. 6 (1)

Eregha & Nwokoma (2014), The human development index and sustainability: a constructive proposal. Ecological Economics 39 (1):101-114

Eskeland & Harrison (2015). Sustainability and Economic growth. Journal of environment.

Eweje, G. (2013), The role of MNEs in community development initiatives in developing countries: corporate social responsibility at work in Nigeria and South Africa, Business and Society, 45(2):93-129.

Glenn Fox (2007)The Real Coase Theorems. Cato Journal, Vol. 27, No. 3

Gray (2002) Panarch: understanding transformations in human and natural system. Island Press, New York, pages 11-17

Hair, J. F., et al (2003), Essentials of Business Research. Indianapolis, IN: Willey http://unctad.org/en/Docs/tdr2011_en.pdf

Hu, L. T. and Bentler, P. M (1999) Cutoff Criteria for Fit Indexes in Covariance Structure Analysis: Conventional Criteria Versus New Alternatives, Structural Equation Modeling, 6(1), 1-55

Ian Gary (2011) Oil and gas revenues, funds and state budgets: Minimizing leakages and maximizing transparency and accountability in the hydrocarbon value chain, : Fuelling Poverty Reduction UNDP Discussion Paper No. 6 http://www.un.org.kh/undp/images/stories/special-pages/extractive- industries/docs/revenue_transparency_eng.pdf

Ite, U. E. (2014) Multinationals and corporate social responsibility in developing countries: a case study of Nigeria, Corporate Social Responsibility and Environmental Management, Vol.11, pp.1-11.

Jacobs M. (1994) “The limit of neoclassicism: Towards an institutional environmental economics”. In Redclift M. and Global Environment Roontledge; London and New York.

John A. Dixon (2008), Environmental Valuation: Challenges and Practices, Economics and Conservation in the Tropics: A Strategic Dialogue.

Judith M. Dean et al. (2009) Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China, Journal of Development Economic 90 (1):pp 1-13

Kalpana Ambastha, Syed Ainul Hussain, Ruchi Ba (2007) Social and economic considerations in conserving wetlands of Indo-Gangetic plains: A case study of Kabartal wetland, India The Environmentalist, 27 (2): 261-273

Kapp, K. W. (2005), The Social Cost of Private Enterprise, Cambridge University Press, Cambridge.

Kearsley & Riddel (2014). Environmental impact of human health. Journal of environment.

Kline, Theresa J. B. Dan Joy D. Klammer (2001), Path Model Analyzed with Ordinary Least Squares Multiple Regression Versus LISREL, The Journal of Psychology, 135(2):213- 225

Krejcie, Robert V. and Morgan, Daryle W. (2007), Determining Sample Size for Research Activities Educational and Psychological Measurement, http://eric.ed.gov/ERICWebPortal/search/detailmini.jsp?_nfpb=true&_&ERICExtSearch

Muran (2011), Cost, Revenue, and Profit Functions. In M.A. Fuss and D. McFadden, eds., Production Economics: A Dual Approach to Theory and Applications. Amsterdam: North-Holland,

Munir A. Hanjra Tadele Ferede Debel Gemechu Gutta (2009) Reducing poverty in sub-Saharan Africa through investments in water and other priorities, Agricultural Water Management, Volume 96, Issue 7, Pages 1062–1070

Neequaye & Oladi (2015) Emergence and development of the National Innovation Systems concept, Research Policy, 35 (5):745-766

Norton, B., R. Costanza and R. Bishop, (2008). The evolution of preferences: why “sovereign” preferences may not lead to sustainable policies and what to do about it. Ecological Economics, vol. 24: 193-211.

Nwankwo, A. (2014), “The determinants of foreign direct investment inflows (FDI) in Nigeria”, paper presented at the 6th Global Conference on Business & Economics, Gutman Conference Centre, Cambridge.

Okaba B. (2011), Petroleum industry and paradox of rural poverty in the Niger Delta; Ethiopia Publishing Company Benin City.

Onosode Gamaliel. (2013) Environmental Issues and the Challenges of the Niger Delta: Perspectives for the Niger Delta Environmental Survey Process. CIBN Press Lagos.

Oren Bar-Gill and Richard A. Epstein (2008) Consumer Contracts: Behavioural Economics vs. Neoclassical Economics, NYU Law and Economics Research Paper No. 07-17 Minnesota Law Review, Vol. 92,

Orubu, C. O. (2002), Fiscal undercurrents in the lingering crisis in Nigeria’s oil- producing states. In: Fiscal Federalism and Democratic Governance in Nigeria NCEMA.

Ramesh C. Kumar (2009) Optimal Domestic Processing of Exhaustible Resource Exports under Stock Uncertainty WEAI, 84th Annual Conference, Vancouver, BC, Canada,

Rana Ejaz Ali Khan and Muhammad Atif Nawaz (2010) Economic Determinants of Foreign Direct Investment in Pakistan. Journal of Economics, 1(2): 99-104

Richard E. Baldwin and Paul Krugman (2014) Agglomeration, integration and tax harmonization. European Economic Review 48(1): 1-23

Rudolf S. De Groof (2002) A typology for the classification, description and valuation of ecosystem function, good and services. Journal of Ecological Economics41(3): 393-408

Silvana Tordo, Brandon S. Tracy and Noora Arfaa (2011) National Oil Companies and Value creation. The International Bank for Reconstruction and Development/The World Bank vol. 11: www.worldbank.org.

Stonich, S. (2002) “Struggling with Honduran poverty – the environmental consequences of natural resource-based development and rural transformations”, World Development, 20(3) 385-400

Terrence Casey and Kevin Christ (2014) Social Capital and Economic Performance in the American States, Social Science Quarterly, 86 (4): 826–845

Thomas Berger, Regina Birner and Nancy McCarthy (2014) Capturing the complexity of water uses and water within the multi-agent framework. Water Resources Management 21 (1): 9-148.

UNCTAD (2015). World Investment Report 2005: Transnational Corporations and the Internationalization of R&D. New York and Geneva.

United Nations Conference on Trade and Development Trade and Development, Report, 2011

Victor Ojakorotu (2010), The dilemma of justice: Foreign oil multinationals and human rights violation in the Niger Delta of Nigeria, in Liam Leonard, John Barry (Ed.) Global Ecological Politics (Advances in Ecopolitics, Volume (5), pp.43-72

Weitzman, M. and Lofgren K.G. (2014), On the welfare significance of green accounting as taught by parable, Journal of Environmental Economics and Management, 32: 139-153.


Refbacks

  • There are currently no refbacks.


 

 

 

 

   

 

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.