IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Do Developing Countries Invest Up? The Environmental Effects of Foreign Direct Investment from Less-Developed Countries

  • Zeng, Ka
  • Eastin, Joshua
Registered author(s):

    This paper examines the environmental effects of foreign direct investment (FDI) from less-developed countries (LDC). We hypothesize that rather than transferring poor home-country practices across borders, LDC FDI can increase the level of environmental stewardship of host-country firms. We contend that LDC firms find it increasing financially advantageous to signal to consumers, investors, and potential business partners their commitment to environmental protection by adopting sound environmental practices. Furthermore, this behavior can create spillover effects to other host-country firms, leading these firms to also boost their environmental credentials. Our empirical findings lend support to these conjectures.

    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://www.sciencedirect.com/science/article/pii/S0305750X12000459
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 40 (2012)
    Issue (Month): 11 ()
    Pages: 2221-2233

    as
    in new window

    Handle: RePEc:eee:wdevel:v:40:y:2012:i:11:p:2221-2233
    Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

    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. Blomstrom, Magnus & Kokko, Ari, 1998. " Multinational Corporations and Spillovers," Journal of Economic Surveys, Wiley Blackwell, vol. 12(3), pages 247-77, July.
    2. Silvio Contessi & Hoda S. El-Ghazaly, 2010. "Multinationals from emerging economies: growing but little understood," The Regional Economist, Federal Reserve Bank of St. Louis, issue Jul, pages 16-17.
    3. Eskeland, Gunnar S. & Harrison, Ann E., 1997. "Moving to greener pastures : multinationals and the pollution-haven hypothesis," Policy Research Working Paper Series 1744, The World Bank.
    4. Brian R. Copeland & M. Scott Taylor, 2003. "Trade, Growth and the Environment," NBER Working Papers 9823, National Bureau of Economic Research, Inc.
    5. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
    6. Pauly, Louis W. & Reich, Simon, 1997. "National structures and multinational corporate behavior: enduring differences in the age of globalization," International Organization, Cambridge University Press, vol. 51(01), pages 1-30, December.
    7. Dasgupta, Susmita & Hua Wang & Wheeler, David, 1997. "Surviving success : policy reform and the future of industrial pollution in China," Policy Research Working Paper Series 1856, The World Bank.
    8. Branstetter, Lee, 2006. "Is foreign direct investment a channel of knowledge spillovers? Evidence from Japan's FDI in the United States," Journal of International Economics, Elsevier, vol. 68(2), pages 325-344, March.
    9. Matthew Potoski & Aseem Prakash, 2005. "Covenants with weak swords: ISO 14001 and facilities' environmental performance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(4), pages 745-769.
    10. Petra Christmann & Glen Taylor, 2001. "Globalization and the Environment: Determinants of Firm Self-Regulation in China," Journal of International Business Studies, Palgrave Macmillan, vol. 32(3), pages 439-458, September.
    11. Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
    12. 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.
    13. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
    14. Xun Cao & Aseem Prakash, 2011. "Growing exports by signaling product quality: Trade competition and the cross‐national diffusion of ISO 9000 quality standards," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 111-135, December.
    15. Alan M Rugman & Alain Verbeke, 1998. "Corporate Strategy and International Environmental Policy," Journal of International Business Studies, Palgrave Macmillan, vol. 29(4), pages 819-833, December.
    Full references (including those not matched with items on IDEAS)

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

    When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:40:y:2012:i:11:p:2221-2233. 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: (Zhang, Lei)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.