Journal
ECOLOGICAL ECONOMICS
Volume 102, Issue -, Pages 113-117Publisher
ELSEVIER
DOI: 10.1016/j.ecolecon.2014.03.013
Keywords
Environmental regulation; Foreign direct investment
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According to the pollution haven effect mobile capital responds to environmental regulation by moving from countries with high regulation to countries with low regulation. Previous tests of the pollution haven effect focus on host country regulation effect. This study also examines the effect of home country regulation on foreign direct investment (FDI). Using a panel of 28 OECD countries for 1990-2000 to estimate host and home country environmental regulations' effect on FDI, this study finds that host regulation decreases FDI. In contrast, home environmental regulation increases FDI at low levels of home regulation and decreases FDI at high levels of home regulation. (C) 2014 Elsevier B.V. All rights reserved.
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