Working Paper: NBER ID: w8888
Authors: Gunnar E. Eskeland; Ann E. Harrison
Abstract: This paper presents evidence on whether multinationals are flocking to developing country 'pollution havens'. Although we find some evidence that foreign investors locate in sectors with high levels of air pollution, the evidence is weak at best. We then examine whether foreign firms pollute less than their peers. We find that foreign plants are significantly more energy efficient and use cleaner types of energy. We conclude with an analysis of US outbound investment. Although the pattern of US foreign investment is skewed towards industries with high costs of pollution abatement, the results are not robust across specifications.
Keywords: No keywords provided
JEL Codes: F23; Q2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| lax regulations (K20) | foreign investment (F21) |
| foreign investment (F21) | improved environmental outcomes (Q56) |
| higher abatement costs in the U.S. (Q52) | investment towards sectors with lower pollution costs abroad (F64) |