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Outward Foreign Direct Investments Patterns of Italian Firms in the EU ETS

Author

Listed:
  • Simone Borghesi

    () (University of Siena, Italy.)

  • Chiara Franco

    () (Catholic University of Sacred Heart, Milano, Italy.)

  • Giovanni Marin

    () (IRCrES-CNR, Milano, Italy.)

Abstract

We consider the role played by the EU Emission Trading System (EU ETS) as a possible driver of outward Foreign Direct Investments (FDI henceforth). In particular, we aim at assessing whether EU ETS has any effect on outward FDI patterns of Italian firms. Using a novel panel dataset of about 59,000 firms covering the first two phases of the EU ETS and the pre-EU ETS period, we are able to observe the patterns of FDI by destination country of firms, distinguishing between those with plants covered by the EU ETS and other firms. Results show that, on average, firms in the EU ETS do not increase their presence in other countries. However, EU ETS firms operating in sectors particularly exposed to international competition increase their outward FDI towards countries not covered by the EU ETS.

Suggested Citation

  • Simone Borghesi & Chiara Franco & Giovanni Marin, 2016. "Outward Foreign Direct Investments Patterns of Italian Firms in the EU ETS," SEEDS Working Papers 0116, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2016.
  • Handle: RePEc:srt:wpaper:0116
    as

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    File URL: http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/0116.pdf
    File Function: Revised version, 2016
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    References listed on IDEAS

    as
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    Cited by:

    1. repec:urb:journl:v:9:y:2018:p:1-24 is not listed on IDEAS
    2. Nicola De Vivo & Giovanni Marin, 2017. "How neutral is the choice of the allocation mechanism in cap-and-trade schemes? Evidence from the EU-ETS," SEEDS Working Papers 0417, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2017.

    More about this item

    Keywords

    EU ETS; FDI; carbon leakage;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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