lmpact of Foreign lnvestment and Natural Resources Sharing Funds Against Environmental Degradation in lndonesia
Abstract
This study examines the impact of foreign investment as a reflection of economic
globalization and fiscal policy in the form of natural resource revenue sharing in
development against environmental degradation, especially water in lndonesia. Using
33 provincial panel data during 2o11-zo1s with the basic model of EKC's of cubic
forms. The results explain that is a relationship between income and degradation
that support the EKC hypothesis, but it not significantly. Foreign investment has a
positive and significant impact on increasing degradation, while fiscal policy has a
negative and not insignificant impact on reducing environmental deEradation. Natural
Resources Sharing Funds are not entirely used for environmental costs but are also
used to provide basic infrastructure. The government needs to increase supervision
of foreign capital, increase revenue sharing for natural resources and focus more on
improving the environment.