Show simple item record Wagner, UJ Timmins, CD 2010-03-09T15:42:59Z 2009-06-01
dc.identifier.citation Environmental and Resource Economics, 2009, 43 (2), pp. 231 - 256
dc.identifier.issn 0924-6460
dc.description.abstract Does environmental regulation impair international competitiveness of pollution-intensive industries to the extent that they relocate to countries with less stringent regulation, turning those countries into "pollution havens"? We test this hypothesis using panel data on outward foreign direct investment (FDI) flows of various industries in the German manufacturing sector and account for several econometric issues that have been ignored in previous studies. Most importantly, we demonstrate that externalities associated with FDI agglomeration can bias estimates away from finding a pollution haven effect if omitted from the analysis. We include the stock of inward FDI as a proxy for agglomeration and employ a GMM estimator to control for endogenous time-varying determinants of FDI flows. Furthermore, we propose a difference estimator based on the least polluting industry to break the possible correlation between environmental regulatory stringency and unobservable attributes of FDI recipients in the cross-section. When accounting for these issues we find robust evidence of a pollution haven effect for the chemical industry. © 2008 Springer Science+Business Media B.V.
dc.format.extent 231 - 256
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.relation.ispartof Environmental and Resource Economics
dc.relation.isversionof 10.1007/s10640-008-9236-6
dc.title Agglomeration effects in foreign direct investment and the pollution haven hypothesis
dc.type Journal Article
dc.department Economics
pubs.issue 2
pubs.organisational-group /Duke
pubs.organisational-group /Duke/Nicholas School of the Environment
pubs.organisational-group /Duke/Nicholas School of the Environment/Environmental Sciences and Policy
pubs.organisational-group /Duke/Trinity College of Arts & Sciences
pubs.organisational-group /Duke/Trinity College of Arts & Sciences/Economics
pubs.publication-status Published
pubs.volume 43

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