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In Search of Environmental Spillovers

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  • Facundo Albornoz
  • Matthew A Cole
  • Robert J R Elliott
  • Marco G Ercolani

Abstract

There is an extensive literature that examines the relationship between foreign direct investment (FDI) and the productivity and competitiveness of domestic firms. Using estimation techniques from the productivity spillover literature, this paper tests for the presence of environmental spillovers from foreign firms. On the basis that foreign owned firms may encourage firms in their extended supply chain to improve their environment related management practices, evidence for the existence of environmental spillovers should be easier to find than productivity spillovers where firms naturally attempt to minimize intra-industry knowledge leakage. In this paper we show that first, foreign owned firms are more likely to implement environmental management systems (EMS) and second, that the presence of foreign owned firms in those sectors that a firm supplies can encourage good environmental practice. This is especially true if a firm is foreign, has high absorptive capacity, and operates in the presence of formal and informal networks.

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Bibliographic Info

Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 08-03.

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Length: 35 pages
Date of creation: May 2008
Date of revision:
Handle: RePEc:bir:birmec:08-03

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Keywords: Multinationals; Environment; Firm Characteristics; Spillovers;

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References

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Citations

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Cited by:
  1. Cole, Matthew A. & Elliott, Robert J.R. & Okubo, Toshihiro & Zhou, Ying, 2013. "The carbon dioxide emissions of firms: A spatial analysis," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 290-309.
  2. Svetlana Batrakova & Ronald Davies, 2010. "Is there an environmental benefit to being an exporter? Evidence from firm level data," The Institute for International Integration Studies Discussion Paper Series iiisdp322, IIIS, revised Mar 2010.
  3. Michael Hübler & Alexander Glas, 2014. "The Energy-Bias of North–South Technology Spillovers: A Global, Bilateral, Bisectoral Trade Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 58(1), pages 59-89, May.
  4. Elliott, Robert J.R. & Sun, Puyang & Chen, Siyang, 2013. "Energy intensity and foreign direct investment: A Chinese city-level study," Energy Economics, Elsevier, vol. 40(C), pages 484-494.
  5. Emma Aisbett, 2010. "Powerful Multinational or Persecuted Foreigners: ‘Foreignness’ and Influence over Government," CEPR Discussion Papers 638, Centre for Economic Policy Research, Research School of Economics, Australian National University.

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