The Effect of Information and Communication Technology and Foreign Direct Investment on Green Productivity in Iran

Subject Areas : Environmental Economics

Behnaz Mashayekhi ¹ , Kambiz Hojhabr kiani ² , Farzaneh Khalili ³ , Farid Asgari ⁴

1 - Ph.D. Student, Department of Economics, Abhar branch, Islamic Azad university, Abhar, Iran.
2 - Prof., Department of Economics,Tehran Science And Research Branch, Islamic Azad university, Tehran, Iran. *(Corresponding Author)
3 - Assistant Professor, Department of Economics, Abhar branch, Islamic Azad university, Abhar, Iran.
4 - Assistant Professor, Department of Economics, Abhar branch, Islamic Azad university, Abhar, Iran

Received: 2018-06-23 Accepted : 2019-11-14 Published : 2021-03-21

Keywords: foreign direct investment, Information and Communication Technology, Sustainable development, Vector Error-Correction Model, Green Productivity,

Abstract :

Background and Purpose: Effective protection of the environment and optimal use of natural resources is one of the most important pillars of sustainable development. Green productivity is a strategy to increase environmental productivity and performance in order to social and economic development. The Information and Communication Technology (ICT) revolution has severely affected all countries in terms of economic, social, political, cultural aspects as well as security, employment, health, the environment, and many other macro variables; so that, the technology has become the main driving force of the world's economy and sustainable development in today's world. According to the importance and the impact of Foreign Direct Investment and Information and Communication Technology on green productivity, this paper uses the Johansen-Joselius coherent test of the relationship between Foreign Direct Investment and Information and Communication Technology and the Green Productivity Index in Iran. Materials and Methods: The effect of Information and Communication Technology and Foreign Direct Investment on green productivity has been investigated in Iran using the Johansen-Joselius coherent test during the period of 1980-2013. Findings: According to the research findings, the Information and Communication Technology and Foreign Direct Investment have a positive and significant and a negative and significant effect of on the Green Productivity Index in Iran, respectively. Also, the vector error correction model shows that the adjustment process is slowing towards the equilibrium. Discussion and Conclusion: According to the obtained results, and considering the negative and significant effect of Foreign Direct Investment on green productivity, which could be as a result of increased pollution, it is suggested that is possible to provide a ground to improve green productivity by adopting policies to reduce the destructive effects of Foreign Direct Investment, including the replacement of green energy. It is also recommended that environmental regulations and standards be imposed upon the entry of Foreign Direct Investment which could be done with less environmental pollution. The effect of Information and Communication Technology index on Green Productivity Index is positive and significant in Iran. Therefore, it can be surely said that the use of Information and Communication Technology, as a solution for green productivity institutionalization is essential for implementing the continuous and effective process of green productivity improvement. It is also suggested to determine criteria, for the development and implementation of the green productivity concept, that fully cover the qualitative patterns of economic growth and development.

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