Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/191458 
Year of Publication: 
2008
Series/Report no.: 
IRENE Working Paper No. 08-01
Publisher: 
University of Neuchâtel, Institute of Economic Research (IRENE), Neuchâtel
Abstract: 
This paper investigates if differences in environmental regulations can influence FDI flows in a multi-country setting taking into account the so-called "third-country" effects. We examine bilateral FDI flows using a new extended OECD investment database which covers great number of host countries and a long sample period (1981-2005). The findings based on a spatial gravity-like model are largely plausible across specifications and confirm the existence of a negative relationship between FDI and environmental stringency, once we correct for endogeneity and spatial dependence. The evidence of a positive "third-country" effect for FDI suggests the prevalence of complex FDI from developed to developing countries. The spatial structure of the model allows also to underline the possible existence of competition in environmental standards between countries to attract FDI.
Subjects: 
Complex FDI
Pollution Haven
Spatial Econometrics
System GMM
JEL: 
F18
Q56
C31
Document Type: 
Working Paper

Files in This Item:
File
Size
34.56 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.