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Title:Green havens and pollution havens PDF Logo
Authors:Poelhekke, Steven
van der Ploeg, Rick
Issue Date:2012
Series/Report no.:CESifo Working Paper: Resource and Environment Economics 3841
Abstract:We test for pollution haven effects in outward foreign direct investment (FDI) for different sectors using a comprehensive and exhaustive dataset for outward FDI from the Netherlands, one of the most environmentally stringent countries and a major source of global FDI. Our evidence suggests that in the sectors natural resources extraction and refining, construction, retail, food processing, beverages and tobacco, and utilities, a less stringent environmental policy in the host country significantly attracts FDI. What is important for these pollution haven effects is not only regulation but also enforcement of environmental policy. In contrast to earlier results, it is not only footloose industries that display pollution haven effects, but also the traditional pollution-intensive industries. But for the sectors machines, electronics and automotive and transportation and communication a more stringent and better enforced environmental policy attracts more FDI as this may help their reputation for sustainable management and CSR. These sectors display green haven effects. These findings have important implications for the sector distribution of FDI in destination countries.
Subjects:pollution haven
green haven
FDI
environmental policy
regulation
enforcement
strategic effects
footloose industries
CSR
JEL:F13
F18
F23
Q50
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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