FDI menjadi salah satu instrumen penting bagi pertumbuhan ekonomi suatu negara. FDI pun membawa sejumlah dampak positif yang terhadap perekonomian host country seperti transfer teknologi, peningkatan SDM, dan pendapatan pajak bagi negara. Sejumlah penelitian pun membuktikan bahwa FDI memiliki peranan penting bagi pertumbuhan ekonomi, baik bagi kelompok developed maupun emerging economies. Namun, terlepas dari kontribusinya, arus masuk FDI menimbulkan sejumlah perdebatan karena berpotensi memberikan dampak buruk terhadap lingkungan seperti peningkatan emisi lingkungan ataupun kerusakan lingkungan bagi host country. Hal ini seringkali diakibatkan oleh sejumlah perusahaan yang memaksimalkan keuntungan dengan berinvestasi di negara-negara yang peraturan lingkungannya tidak memadai sehingga menimbulkan eksternalitas negatif bagi lingkungan host country. Lebih lanjut, kualitas institusi politik memainkan peranan penting dalam kualitas lingkungan yang dimiliki suatu negara. Sejumlah studi pun menemukan hasil yang berbeda mengenai dampak FDI dan kualitas institusi politik terhadap degradasi lingkungan, seperti hubungan positif antara FDI serta kualitas kelembagaan terhadap degradasi lingkungan atau FDI dan institusi politik yang justru menurunkan degradasi lingkungan. Lebih lanjut, bagaimana fenomena yang terjadi baik pada kelompok developed maupun emerging countries di Asia Pasifik?. Dalam rangka mengetahui dampak FDI dan institusi politik terhadap degradasi lingkungan, peneliti menggunakan metode regresi data panel Fully Modified OLS (FMOLS). Penelitian ini menemukan hasil yang berbeda antara kelompok developed dan emerging economies terkait dampak FDI dan institusi politik terhadap degradasi lingkungan. Hal ini disebabkan karena terdapat sejumlah perbedaan karakteristik antar kelompok.

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FDI is one of the important instruments for the economic growth of a country. FDI also brings a number of positive impacts on the host country's economy, such as technology transfer, human resource development, and tax revenue for the country. A number of studies also prove that FDI has an important role for economic growth, both for the developed and emerging economies groups. However, regardless of its contribution, FDI inflows have caused a number of debates because they have the potential to have a negative impact on the environment such as increased environmental emissions or environmental damage to the host country. This is often caused by a number of companies maximizing profits by investing in countries where the environmental regulations are inadequate, creating negative externalities for the host country's environment. Furthermore, the quality of political institutions plays an important role in the quality of a country's environment. A number of studies also found different results regarding the impact of FDI and the quality of political institutions on environmental degradation, such as a positive relationship between FDI and institutional quality on environmental degradation or FDI and political institutions that actually reduce environmental degradation. Furthermore, how is the phenomenon that occurs in both the developed and emerging countries groups in Asia Pacific? In order to determine the impact of FDI and political institutions on environmental degradation, the researcher uses the Fully Modified OLS (FMOLS) panel data regression method. This study found different results between the developed and emerging economies groups regarding the impact of FDI and political institutions on environmental degradation. This is because there are a number of differences in characteristics between groups.