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Endogenous Pollution Havens: Does FDI Influence Environmental Regulations?*
Open accessAbstract
We suggest a novel perspective on the relationship between the stringency of environmental policies and foreign direct investment (FDI). We develop a political economy model with imperfect product market competition where local and foreign firms jointly lobby the local government for a favorable pollution tax. FDI is found to affect environmental policy, and the effect is conditional on the local government's degree of corruptibility. If the degree of corruptibility is sufficiently high (low), FDI leads to less (more) stringent environmental policy, and FDI thus contributes to (mitigates) the creation of a pollution haven. Our empirical results using panel data from 33 countries support the predictions of the model.
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Citations
Cites
Olson, M. (1965) · doi:10.4159/9780674041660 · Cited by 14,191
The Determinants of Foreign Direct Investments: Sensitivity Analyses of Cross‐Country Regressions
Chakrabarti, A. (2001) · Kyklos · doi:10.1111/1467-6435.00142 · Cited by 1,073
Cited by
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Leiter, A. M., Parolini, A., & Winner, H. (2011) · Ecological Economics · doi:10.1016/j.ecolecon.2010.11.013 · Cited by 314
Waste generation, waste disposal and policy effectiveness
Mazzanti, M., & Zoboli, R. (2008) · Resources, Conservation and Recycling · doi:10.1016/j.resconrec.2008.07.003 · Cited by 277
Wang, X., Zhang, C., & Zhang, Z. (2019) · Journal of Environmental Management · doi:10.1016/j.jenvman.2019.07.019 · Cited by 233
Biofuels, environmental sustainability and food security: A review of 51 countries
Subramaniam, Y., Masron, T. A., & Azman, N. H. N. (2020) · Energy Research & Social Science · doi:10.1016/j.erss.2020.101549 · Cited by 130
Metadata
- Authors
- Cole, M. A., Elliott, R. J. R., & Fredriksson, P. G.
- Venue
- The Scandinavian Journal of Economics
- Publisher
- Wiley
- Published
- 2006-03
- Volume
- 108
- Issue
- 1
- Pages
- 157-178
- ISSN
- 0347-0520 (ISSN-L)
- 1467-9442
- OpenAlex
- W3121970109
- Cited by
- 446
- References
- 2
- FWCI
- 33.45
- Type
- journal article
- Language
- en
- Open access
- green
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- Cole, M. A., Elliott, R. J. R., & Fredriksson, P. G. (2006). Endogenous Pollution Havens: Does FDI Influence Environmental Regulations?*. The Scandinavian Journal of Economics. https://doi.org/10.1111/j.1467-9442.2006.00439.x
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
