Pollution emissions and foreign-owned manufacturing plants

We document significant variation in the relative pollution emissions of foreign-owned and domestically owned-manufacturing plants in the U.S. We use a sample of matched plant characteristics and pollution emissions to document the pollution emissions of foreign-owned facilities relative to their competitors in the same industry. On average there is no difference in emissions intensity between domestic- and foreign-owned plants across all manufacturers, but in some industries foreign-owned plants are much cleaner, while in others much dirtier. We show that the variation in relative pollution emissions of foreign-owned manufacturing plants is correlated with industry characteristics: lower industry-level trade costs, higher fixed costs, and lower returns to agglomeration are associated with cleaner foreign-owned plants. These results are consistent with a theoretical framework in which foreign plants have lower productivity, and therefore more pollution intensity, in industries where foreign ownership is more attractive relative to exporting.