Christer Ljungwall () (China Center of Economic Research, Peking University) Martin Linde-Rahr (Department of economics and statistics, Goteborg University)
Abstract
This paper introduce an environmental policy variable, i.e., the provincial pollution levy paid by an average firm, and measure its impact on the foreign investors' location decisions over the 1987 to 1998 period. We argue that less developed regions in China are more inclined to sacrifice environmental policies as an instrument to attract foreign direct investment (FDI). National level results show that stringent environmental policies have insignificant effect on foreign investors' location decision, and that transportation, economic growth, and regional location matters more. At the provincial level stringent environmental policies reduce FDI in the less developed regions.
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Publisher Info
Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number
681.
Length: 25 pages Date of creation: Dec 2005 Date of revision: Handle: RePEc:eab:macroe:681
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Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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