Environment, growth, and FDI revisited

•We examine the effects of per capita income on emission.•We examine the effects of foreign direct investment on emission.•We examine the effects of environmental aid on emission.

This paper examines the effects of foreign direct investment inflows and environmental aid disbursements on environmental degradation using panel data for some selected developing countries. Using a fixed effects model, our estimates suggest the existence of an environmental Kuznets curve for carbon dioxide as well as total green house gas emissions from the energy and industrial sectors but there was no evidence of this phenomenon for nitrous oxide and total green house gas emissions from the waste sector. We also find a hint of a technique effect, and investigate it further by exploring the responsiveness of capital and labor to investment inflows in the respective developing countries.