The lesser of two evils: an empirical investigation of foreign direct investment-pollution tradeoff

This article investigates the relationship between Foreign Direct Investment (FDI) and pollution measured by carbon dioxide (CO 2 ) emissions. The results suggest that while lax environmental regulations might attract FDI, the foreign companies utilize less polluting technology as compared to local...

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Veröffentlicht in:Applied economics 2012-07, Vol.44 (20), p.2597-2606
Hauptverfasser: Kim, Myeong Hwan, Adilov, Nodir
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Adilov, Nodir
description This article investigates the relationship between Foreign Direct Investment (FDI) and pollution measured by carbon dioxide (CO 2 ) emissions. The results suggest that while lax environmental regulations might attract FDI, the foreign companies utilize less polluting technology as compared to local firms in low-income countries. Thus, FDI does not necessarily increase pollution levels in the host countries. The findings, therefore, simultaneously support the pollution haven and the pollution halo hypotheses.
doi_str_mv 10.1080/00036846.2011.566187
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subjects Carbon emissions
Correlation analysis
Economic models
environment and development
Environmental policy
FDI
Foreign direct investment
Foreign enterprises
Foreign investment
Pollution
Pollution control
Regulation
Studies
Trade-off
title The lesser of two evils: an empirical investigation of foreign direct investment-pollution tradeoff
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