Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/108809 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5262
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This study examines how environmental stringency affects the location decision of foreigndirect investments. We analyze a firm-level data set on German outbound FDI and innovate onprevious studies by controlling for the mode of entry and applying the mixed-logit analysis. Theresults show that Greenfield projects react to environmental regulation in a strongly differentway than M&As. We find robust support for pollution haven hypothesis for pollutingGreenfields. M&A investments in low polluting industries, on the other hand, seem to beattracted by stricter environmental regulation. We introduce a new instrumental variable forenvironmental stringency and apply it to verify the results.
Subjects: 
FDI
environmental stringency
mixed logit
entry mode
PHH
JEL: 
F64
Q50
Q58
Document Type: 
Working Paper
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