Outward Foreign Direct Investment Patterns of Italian Firms in the European Union's Emission Trading Scheme*
Open accessAbstract
We consider the role played by the European Union's Emissions Trading System (EU ETS) as a possible driver of outward foreign direct investment (FDI) for Italian manufacturing firms. Using a panel dataset of about 22,000 firms covering the first two phases of the EU ETS and the period before the EU ETS, we measure the patterns of FDI towards countries not covered by the EU ETS. The results show that the EU ETS had a weak effect on the number of new subsidiaries abroad (extensive margin), while it had a larger impact on production taking place in foreign subsidiaries (intensive margin), especially in trade‐intensive sectors.
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Higher domestic costs tend to deter new investment, thus shifting new investment abroad, a process that is slower and harder to detect.
“However, higher domestic costs tend to deter new investment, thus shifting new investment abroad, a process that is slower and harder to detect (31-33).”
From Carbon Leakage, Consumption, and Trade (2022) · cites this paper as [33]
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Embodied carbon emissions in the supply chains of multinational enterprises
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Carbon Leakage, Consumption, and Trade
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- Authors
- Borghesi, S., Franco, C., & Marin, G.
- Affiliations
- University of Siena (IT)
- University of Pisa (IT)
- University of Urbino (IT)
- Corresponding author
- Franco, Chiara
- Venue
- The Scandinavian Journal of Economics
- Publisher
- Wiley
- Published
- 2019-07-05
- Volume
- 122
- Issue
- 1
- Pages
- 219-256
- ISSN
- 0347-0520 (ISSN-L)
- 1467-9442
- OpenAlex
- W3037344427
- Cited by
- 86
- References
- 6
- Citations by year
- 2026: 7 · 2025: 11 · 2024: 20 · 2023: 17 · 2022: 13 · 2021: 7 · 2020: 4 · 2019: 1 · 2018: 4 · 2016: 1
- FWCI
- 6.68
- Type
- journal article
- Language
- en
- Open access
- green
- hdl.handle.net
- Licence
- Locations
- Scandinavian Journal of Economics (publishedVersion)
- CINECA IRIS Institutial research information system (University of Pisa) (submittedVersion, other-oa)
- Use Siena air (University of Siena) (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Keywords
- outward foreign direct investment, EU Emissions Trading System, carbon pricing, Italian manufacturing firms, extensive margin, intensive margin, foreign subsidiaries
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