[2] Fiscal and financial incentives stemming from ecological motivators, such as carbon taxation, are methods used based on the desired outcome within a country in order to attract foreign direct investment.
[3] External funding sources that come from foreign direct investment stimulates the increase of innovative ideas surrounding technological advances while it also holds the potential to decrease unemployment.
Foreign direct investments allow for the chance of compromise and collaboration between policies of negotiating countries, which brings the opportunity for new perspectives on green innovation.
However, intensifying regulations around production costs, such as environmental effect, can decrease the attraction of foreign direct investment to that country.
[7] Fiscal incentives alone, such as taxation laws that aim to reduce the tax burden of a firm, do not largely contribute to attracting foreign direct investment in research and development.
[24] China has accomplished reducing carbon emissions through far reaching efficiency programs as in 2004, the country adopted national fuel-efficiency standards for vehicles.
[25] Many developing countries desire increased inflows of foreign direct investment as it brings the potential of technological innovation.
[10] However, studies have shown a host country must reach a certain level of development in education and infrastructure sectors in able to truly capture any potential benefits foreign direct investment might bring.
[25] If a country already has sufficient funds in terms of per capita income, as well as an established financial market, foreign direct investment has the potential to influence positive economic growth.
[25] Pre-determined financial efficiency combined with an educated labor force are the two main measures of whether or not foreign direct investment will have a positive impact on economic growth within a country.
However, since the surge in foreign direct investment inflow, pollution emission and resource depletion has been increasing at alarming rates due to greater economic activity (such as the cement, transportation and paper industries).
[25] Studies have demonstrated that there is a causal link between Carbon dioxide per capita, and foreign direct investment inflow in Nigeria.
[citation needed] Foreign direct investment can be critical in promoting growth in the adoption of new technologies, stimulating knowledge transfers, and introducing alternative management practices as well as better institutional organization arrangements.
Therefore, in many African countries, foreign direct investment impacts constitutes a key outcome of globalization which can propel them to support and promote liberalization policies.
[citation needed] In many globalization discussions, it is argued that environmental quality can be viewed as a good, therefore increasing free trade and foreign direct investment would lead to a cleaner environment.
[29] There is constant growing evidence demonstrating that the increase of foreign direct investment within Nigeria, leads to further deterioration of their natural environment.
[citation needed] According to the report of Asian Development Outlook,[30] Armenia's exports, international remittances, and private capital inflows have all been negatively impacted by regional and global downturns, which have caused the nation to enter its worst recession since shortly after independence.
The recession caused a decline in many of Armenia's key economic sectors, including the production of chemicals, building materials, mining and metallurgy, and the trade in processed diamonds.
Agriculture did not experience any continuous expansion, and the services sector only expanded by 0.7 percent as a result of limited activity in the financial, tourist, communications, and transportation industries.