Advanced Search
MyIDEAS: Login to save this paper or follow this series

Environmental Regulations and FDI Inflows to U.S. States

Contents:

Author Info

Abstract

This paper estimates the extent to which stringent environmental standards in some U.S. states have deterred foreign direct investment (FDI). It addresses three shortcomings in the existing literature on the economic effects of environmental regulations. First, it avoids comparing regulations in different countries by using data on the regulatory stringency of U.S. states, and examining whether there is relatively more FDI to less stringent states. Second, it uses use an index of relative compliance costs that accounts for states' different industrial compositions. Third, it uses a panel of annual measures of relative regulatory stringency from 1977 to 1994. We examine two types of FDI data: BEA data on gross property, plant and equipment investment at foreign-owned manufacturing facilities; and ITA data on planned new factory expenditures by foreign-owned firms. We find some evidence of small deterrent effects of environmental regulations on particularly pollution-intensive industries, but little evidence of large or widespread effects. While the broad conclusions are consistent with the existing literature, this paper does address three important concerns with that literature.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www8.georgetown.edu/departments/economics/pdf/006.pdf
File Function: Full text
Download Restriction: None

Bibliographic Info

Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~00-00-06.

as in new window
Length: 40
Date of creation: 05 Aug 2000
Date of revision:
Handle: RePEc:geo:guwopa:gueconwpa~00-00-06

Contact details of provider:
Postal: Georgetown University Department of Economics Washington, DC 20057-1036
Phone: 202-687-6074
Fax: 202-687-6102
Email:
Web page: http://econ.georgetown.edu/

Order Information:
Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
Email:
Web: http://econ.georgetown.edu/

Related research

Keywords: environmental regulations; foreign direct investment; pollution haven; pollution abatement costs;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Vernon Henderson, 1995. "Effects of Air Quality Regulation," NBER Working Papers 5118, National Bureau of Economic Research, Inc.
  2. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
  3. Randy A. Becker & J. Vernon Henderson, 1999. "Costs of Air Quality Regulation," NBER Working Papers 7308, National Bureau of Economic Research, Inc.
    • Randy A. Becker & J. Vernon Henderson, 2001. "Costs of Air Quality Regulation," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 159-186 National Bureau of Economic Research, Inc.
  4. Eli Berman & Linda T.M. Bui, 1998. "Environmental Regulation and Productivity: Evidence from Oil Refineries," NBER Working Papers 6776, National Bureau of Economic Research, Inc.
  5. repec:fth:coluec:718 is not listed on IDEAS
  6. Levinson, Arik, 1996. "Environmental regulations and manufacturers' location choices: Evidence from the Census of Manufactures," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 5-29, October.
  7. Arik Levinson, 2001. "An Industry-Adjusted Index of State Environmental Compliance Costs," NBER Chapters, in: Behavioral and Distributional Effects of Environmental Policy, pages 131-158 National Bureau of Economic Research, Inc.
  8. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January.
  9. John A. List & W. Warren McHone & Daniel L. Millimet, 2003. "Effects of air quality regulation on the destination choice of relocating plants," Oxford Economic Papers, Oxford University Press, vol. 55(4), pages 657-678, October.
  10. Josh Ederington, 2001. "International Coordination of Trade and Domestic Policies," American Economic Review, American Economic Association, vol. 91(5), pages 1580-1593, December.
  11. List, John A. & Co, Catherine Y., 2000. "The Effects of Environmental Regulations on Foreign Direct Investment," Journal of Environmental Economics and Management, Elsevier, vol. 40(1), pages 1-20, July.
  12. Brian R. Copeland, 1990. "Strategic Interaction among Nations: Negotiable and Non-negotiable Trade Barriers," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 84-108, February.
  13. Low, P., 1992. "International Trade and the Environment," World Bank - Discussion Papers 159, World Bank.
  14. Wayne B. Gray, 1997. "Manufacturing Plant Location: Does State Pollution Regulation Matter?," NBER Working Papers 5880, National Bureau of Economic Research, Inc.
  15. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  16. Congleton, Roger D, 1992. "Political Institutions and Pollution Control," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 412-21, August.
  17. Kahn, Matthew E., 1997. "Particulate pollution trends in the United States," Regional Science and Urban Economics, Elsevier, vol. 27(1), pages 87-107, February.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Simon Condliffe & O. Ashton Morgan, 2009. "The effects of air quality regulations on the location decisions of pollution-intensive manufacturing plants," Journal of Regulatory Economics, Springer, vol. 36(1), pages 83-93, August.
  2. David F. Bradford & Rebecca Schlieckert & Stephen H. Shore, 2000. "The Environmental Kuznets Curve: Exploring A Fresh Specification," NBER Working Papers 8001, National Bureau of Economic Research, Inc.
  3. Hanna Rema Nadeem & Oliva Paulina, 2010. "The Impact of Inspections on Plant-Level Air Emissions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-33, March.
  4. James Boyce, 2003. "Inequality and Environmental Protection," Working Papers wp52, Political Economy Research Institute, University of Massachusetts at Amherst.
  5. Hilary Sigman, 2001. "International Spillovers and Water Quality in Rivers: Do Countries Free Ride?," Departmental Working Papers 200111, Rutgers University, Department of Economics.
  6. Josh Ederington & Arik Levinson & Jenny Minier, 2005. "Footloose and Pollution-Free," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 92-99, February.
  7. Jeffrey A. Frankel & Andrew K. Rose, 2002. "Is Trade Good or Bad for the Environment? Sorting Out the Causality," NBER Working Papers 9201, National Bureau of Economic Research, Inc.
  8. Raghbendra Jha & K.V. Bhanu Murthy, 2003. "A Critique of the Environmental Sustainability Index," Departmental Working Papers 2003-08, The Australian National University, Arndt-Corden Department of Economics.
  9. J. Aznar-Márquez & J. R. Ruiz-Tamarit, . "Non-Catastrophic Endogenous Growth and the Environmental Kuznets Curve," Working Papers 2004-15, FEDEA.
  10. Jeffrey A. Frankel, 2000. "Globalization of the Economy," NBER Working Papers 7858, National Bureau of Economic Research, Inc.
  11. James A. Yunker, 2003. "Capital Wealth Inequality and Public Bads: A Mathematical Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 29(1), pages 105-119, Winter.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:geo:guwopa:gueconwpa~00-00-06. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marcia Suss).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.