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Optimal Environmental Regulation on International Joint Ventures in Developing Countries

Author

Listed:
  • Eun-Mo Yang

    (Sungkyunkwan University)

  • Young-Han Kim

    (Sungkyunkwan University)

Abstract

This paper examines how environmental regulation affects the FDI strategies of parent firms in developing countries (the South) and developed countries (the North) when there are differences in the abatement technology and R&D efficiency between these countries. If there are more lenient regulations, it is more attractive to form a JV in the South. However, southern governments opt for lenient regulation when the abatement technology of the North, while not good, is still superior to that of the South. Furthermore, the welfare of the developing country is optimal when forming a domestic JV. This paper focused on FDI strategies in terms of the welfare of the South, with a view to being able to provide better policy modeling for the developing countries.

Suggested Citation

  • Eun-Mo Yang & Young-Han Kim, 2014. "Optimal Environmental Regulation on International Joint Ventures in Developing Countries," Proceedings of International Academic Conferences 0902860, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:0902860
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Emission standard; R&D; Developing country; Environmental regulation;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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