Researches

The Economic and Environmental Impact of FDI in the Mongolian Coal Export Sector

Authors: Ragachaasuren Galindev and others

Source: Economic Research Institute

Keywords: Computable General Equilibrium (CGE) Model, Social Accounting Matrix, FDI in coal sector, greenhouse gas (GHG) emission, impact analysis

Date: 2019-07-04

This study was carried out by ERI and Gerege Partners LLC within the scope of the Institutional Support Project with financial and methodological support from the Partnership for Economic Policy (PEP).

In the study, the research team constructed and utilized the Social accounting matrix (SAM)-2014 as the main database for the analysis. The research team then examined the impact of Foreign Direct Investment (FDI) aimed at increasing the export capacity of the coal sector on the Mongolian economy and environment by using a recursive dynamic Computable General Equilibrium model. FDI is assumed to expand the coal export sector and be used to construct a railway line connecting the main coal reserve in Mongolia and the Chinese border. The impact of FDI on the economy was estimated through its effect on macroeconomic variables, economic sectors and on the environment through greenhouse gas (GHG) emission. The simulation is ran with two scenarios over 10 years between 2014 and 2023.

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