Government effectiveness and immigrant outflows: their role in advancing greenfield investment globally and regionally

Abstract

The EU's Greenfield Investment, central to the European Green Deal, seeks to foster climate-neutral growth by attracting investments in eco-friendly facilities. Effective governance is crucial for managing the dual impact of emigration on talent retention and capital infusion, ensuring the success of these initiatives. This paper aims to test our hypothesis on the effect of the quality of government and emigrant outflows on greenfield investment in the EU from 2007–2022. This study applies the OLS-PCSE and S-GMM models to test the hypotheses. Research confirms that both government quality and emigrant outflows significantly influence greenfield investments, with emigrants enhancing investment through knowledge and capital transfer and effective governance facilitating stability that attracts further investment.