The importance of efficient use of energy resources in foreing direct investments towards developing countries

Foreign direct investments are significant formulas for developing countries that struggle with insufficient accumulation of capital and unemployment along with the globalization process. The inflow of foreign direct investments to the developing countries depends on elements such as political and economic stability, natural resource and raw material wealth, and low-cost labor. As possessing primary energy resources such as petroleum in natural resources is effective on the growth of developing countries, it is also an important factor in drawing foreign direct investments. However, energy resources are not distributed evenly around the world. For this reason, it is important to efficiently use the available energy resources. The aim of the study is to determine the effect of the productive using of primary energy resources on foreign direct investments directed to developing countries. In accordance with this purpose, panel regression analysis was conducted by using the data of 7 developing countries for the period of 2000-2014 (15 years). In the model, energy efficiency was measured with energy density. As a result of the analysis, it was determined that the efficient use of primary energy resources in developing countries positively affects the inflow of foreign direct investments. For this reason, developing countries should put in the necessary effort for implementing technologies that would decrease energy density, in other words, increase the energy efficiency.