Arbeitspapier

Do Environmental Regulations Effect FDI decisions? The Pollution Haven Hypothesis Revisited

In an attempt to verify the pollution haven hypothesis, this study investigates the impact of environmental regulations on foreign direct investment (FDI). We use Korean outward FDI data covering the manufacturing sector for 2009-15. The study not only considers the stringency but also the enforcement of environmental regulations when measuring the degree of the host country’s environmental regulations. Since the pollution haven’s effects indicate moving the polluting production stages from the home country to other (host) countries, we distinguish between investments in the ‘production’ part from that in the non-production part using location information about the host country. The main results of the estimation of a FDI model show that the stricter the regulations in host countries in Asia the lower the FDI both intensively and extensively to those countries. This supports the prevalence of the effects of pollution havens. However, before we separate the FDI into the production part, the effect of environmental regulations on FDI is hindered by the FDI in the non-production part. The results indicate that environmental regulations are determinants of FDI in the production part, while environmental regulations do not have a significant effect on FDI decisions when the entire FDI is considered.

Sprache
Englisch

Erschienen in
Series: GLO Discussion Paper ; No. 86

Klassifikation
Wirtschaft
Multinational Firms; International Business
Energy, Environmental, Health, and Safety Law
Economics of Regulation
Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
Thema
Pollution haven hypothesis
environmental regulation
foreign direct investment

Ereignis
Geistige Schöpfung
(wer)
Yoon, Haeyeon
Heshmati, Almas
Ereignis
Veröffentlichung
(wer)
Global Labor Organization (GLO)
(wo)
Maastricht
(wann)
2017

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Yoon, Haeyeon
  • Heshmati, Almas
  • Global Labor Organization (GLO)

Entstanden

  • 2017

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