FDI and environmental regulation: Pollution haven or a race to the top?

Journal of Regulatory Economics

Volumn 41, Issue 2, 2012, Pages 216-237

  Dong, Baomin ^a,b   Gong, Jiong ^b   Zhao, Xin ^c  

^a ZHEJIANG UNIVERSITY   (China)

^b UNIVERSITY OF INTERNATIONAL BUSINESS AND ECONOMICS   (China)

^c UNIVERSITY OF TORONTO   (Canada)

Author keywords

Emission standard; FDI; Race to the bottom; Regulatory chill

Indexed keywords

EID: 84857914333     PISSN: 0922680X     EISSN: None     Source Type: Journal    
DOI: 10.1007/s11149-011-9162-3     Document Type: Article

References (46)

1. Aliyu, M. A. (2005). Foreign direct investment and the environment: Pollution haven hypothesis revisited. In Eighth Annual Conference on Global Economic Analysis, Lüeck, Germany.
2. Becker R., Henderson J. V. (2000) Effects of air quality regulations on polluting industries. Journal of Political Economy 108(2): 379-421.
3. Brainard L. (1997) An empirical assessment of the proximity-concentration trade-off between multinational sales and trade. American Economic Review 87(4): 520-544.
4. Brunnermeier S., Arik L. (2004) Examining the evidence on environmental regulations and industry location. Journal of the Environment and Development 13(1): 6-41.
5. Cole M., Elliott R. J. R., Fredriksson P. G. (2006) Endogenous pollution havens: Does FDI influence environmental regulations?. Scandinavian Journal of Economics 108: 157-178.
6. Condliffe S., Morgan O. A. (2009) The effects of air quality regulations on the location decisions of pollution-intensive manufacturing plants. Journal of Regulatory Economics 36(1): 83-93.
7. Copeland B. R., Taylor M. S. (1994) North-South trade and the environment. Quarterly Journal of Economics 109: 755-787.
8. Copeland B. R., Taylor M. S. (1995) Trade and transboundary pollution. American Economic Review 85: 716-737.
9. Copeland B. R., Taylor M. S. (2003) Trade and the environment: Theory, and evidence. Princeton University Press, Princeton, NJ.
10. Copeland B. R., Taylor M. S. (2004) Trade, growth, and the environment. Journal of Economic Literature 42(1): 7-71.
11. Copeland B. R., Taylor M. S. (2005) Free trade and global warming: a trade theory view of the Kyoto protocol. Journal of Environmental Economics and Management 49: 205-234.
12. De Santis, R. A., & Stähler, F. (2008). Foreign direct investment and environmental taxes. European Central Bank Working Paper, No. 921.
13. Dean, J. M. (1992). Trade and environment: A survey of the literature. In P. Low (Ed.), International trade and the environment. World Bank Discussion Papers, No. 159. Washington, DC: World Bank.
14. Dean J. M. (2001) International trade and environment. Ashgate Publishers, Aldershot, UK.
15. Dean J. M., Lovely M. E., Hua W. (2009) Are foreign investors attracted to weak environmental regulations? Evaluating the evidence from China. Journal of Development Economics 90(1): 1-13.
16. Ederington J., Levinson A., Minier J. (2005) Footloose and pollution-free. Review of Economics and Statistics 87: 92-99.
17. Ederington J., Minier J. (2003) Is environmental policy a secondary trade barrier? An empirical analysis. Canadian Journal of Economics 36: 137-154.
18. Eskeland G., Harrison A. (2003) Moving to greener pastures? Multinationals and the pollution-haven hypothesis. Journal of Development Economics 70: 1-23.
19. Fabry, N., & Zenghi, S. (2002). FDI and the environment: Is China a polluter haven. Universite de Marne-la-Vallee Working Paper.
20. Fredriksson P. G., List J. A., Millimet D. L. (2004) Chasing the smokestack: Strategic policymaking with multiple instruments. Regional Science and Urban Economics 34: 387-410.
21. Fredriksson P. G., Millimet D. L. (2002) Strategic interaction and the determination of environmental policy across U. S. States. Journal of Urban Economics 51: 101-122.
22. Fullerton D. (2001) A framework to compare environmental policies. Southern Economic Journal 68(2): 224-248.
23. Gray K. R. (2002) Foreign direct investment and environmental impacts-Is the debate over?. Review of European Community and International Environmental Law 11(3): 306-313.
24. Greenstone M. (2002) The impacts of environmental regulations on industrial activity: Evidence from the 1970 and 1977 clean air acts and the census of manufactures. Journal of Political Economy 110(6): 1175-1219.
25. Helpman E. (2006) Trade, FDI and the organization of firms. Journal of Economic Literature 44: 589-630.
26. Jaffe A. B., Peterson S. R., Portney P. R., Stavins R. N. (1995) Environmental regulations and the competitiveness of U. S. manufacturing: What does the evidence tell us?. Journal of Economic Literature 33(1): 132-163.
27. Kahn, M. R., & Yoshino, Y. (2004). Testing for pollution havens inside and outside regional trading blocs. Advances in Economic Analysis and Policy, 4(2), Article 4.
28. Kayalica M., Lahiri S. (2005) Strategic environmental policies in the presence of foreign direct investment. Environmental & Resource Economics 30: 1-21.
29. Kellenberg D. K. (2009) An empirical investigation of the pollution haven effect with strategic environment and trade policy. Journal of International Economics 78: 242-255.
30. Keller W., Levinson A. (2002) Pollution abatement costs and foreign direct investment inflows to the U. S. states. Review of Economics and Statistic 84: 691-703.
31. Letchumanan R., Kodoma F. (2000) Reconciling the conflict between the 'pollution-haven' hypothesis and an emerging trajectory of international technology transfer. Research Policy 29(1): 59-79.
32. Leonard J. (1988) Pollution and the struggle for world product. Cambridge University Press, New York.
33. Levinson, A. (1996a). Environmental regulations and industry location. In J. Bhagwati & R. Hudec (Eds.), Fair trade and harmonization (Vol. 1). Cambridge, MA: MIT Press.
34. Levinson A. (1996b) Environmental regulation and manufactures' location choices: Evidence from the census of manufactures. Journal of Public Economics 65: 5-29.
35. List J. A., McHone W. W., Millimet D. L., Fredriksson P. G. (2003) Effects of environmental regulations on manufacturing plant births: Evidence from a propensity score matching estimator. Review of Economics and Statistics 85(4): 944-952.
36. Markusen J. R., Morey E. R., Olewiler N. D. (1995) Competition in regional environmental policies when plant locations are endogenous. Journal of Public Economics 56: 55-77.
37. Millimet D. L., List J. A. (2004) The case of the missing pollution haven hypothesis. Journal of Regulatory Economics 26(3): 239-262.
38. Neumayer, E. (2000). Pollution havens: Why be afraid of international factor mobility? London School of Economics and Political Science mimeo.
39. Shen J. (2008) Trade liberalization and environmental degradation in China. Applied Economics 40: 997-1004.
40. Silva E. C. D., Zhu X. (2009) Emissions trading of global and local pollutants, pollution havens and free riding. Journal of Environmental Economics and Management 58: 169-182.
41. Smarzynska, B. K., & Wei, S.-J. (2001). Pollution havens and foreign direct investment: Dirty secret or popular myth? NBER Working Paper No. 8465.
42. Umanskaya V. I., Barbier E. B. (2008) Can rich countries become pollution havens?. Review of International Economics 16(4): 627-640.
43. Wagner U. J., Timmins C. D. (2009) Agglomeration effects in foreign direct investment and the pollution haven hypothesis. Environmental and Resource Economics 43: 231-256.
44. Wu, X. (2004). Pollution havens and the regulations of multinationals with asymmetric information. Contributions to Economic Analysis & Policy, 3(2), Article 1.
45. Xing Y., Kolstad C. D. (2002) Do lax environmental regulations attract foreign investment?. Environmental and Resource Economics 21(1): 1-22.
46. Zhang J., Fu X. (2008) FDI and environmental regulations in China. Journal of the Asia Pacific Economy 13(3): 332-353.