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Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States
Abstract
This paper estimates the effect of changing environmental standards on patterns of international investment. The analysis advances the existing literature in three ways. First, we avoid comparing different countries by examining foreign direct investment in the United States and differences in pollution abatement costs among U.S. states. Data on environmental costs in U.S. states are more comparable than those for different countries, and U.S. states are more similar in other difficult-to-measure dimensions. Second, we allow for differences in states' industrial compositions, an acknowledged problem for earlier studies. Third, we employ an 18-year panel of relative abatement costs, allowing us to control for unobserved state characteristics. We find robust evidence that abatement costs have had moderate deterrent effects on foreign investment.
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Cites
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Environmental Regulation and Productivity: Evidence from Oil Refineries
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Do Lax Environmental Regulations Attract Foreign Investment?
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Self-citationPolitical Institutions and Pollution Control
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Kahn, M. E. (2005) · Review of Economics and Statistics · doi:10.1162/0034653053970339 · Cited by 1,393
Environmental regulation and investment: Evidence from European industry data
Leiter, A. M., Parolini, A., & Winner, H. (2011) · Ecological Economics · doi:10.1016/j.ecolecon.2010.11.013 · Cited by 314
Environmental regulation and carbon emission: The mediation effect of technical efficiency
Pei, Y., Zhu, Y., Liu, S., Wang, X., & Cao, J. (2019) · Journal of Cleaner Production · doi:10.1016/j.jclepro.2019.07.074 · Cited by 298
US Environmental Regulation and FDI: Evidence from a Panel of US-Based Multinational Firms
Hanna, R. (2010) · American Economic Journal: Applied Economics · doi:10.1257/app.2.3.158 · Cited by 263
Wang, X., Zhang, C., & Zhang, Z. (2019) · Journal of Environmental Management · doi:10.1016/j.jenvman.2019.07.019 · Cited by 233
Metadata
- Authors
- Keller, W., & Levinson, A.
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 2002-11
- Volume
- 84
- Issue
- 4
- Pages
- 691-703
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W2118997366
- Cited by
- 508
- References
- 17
- FWCI
- 36.57
- Type
- journal article
- Language
- en
- Open access
- closed
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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