Title

The Lesser of Two Evils: An Empirical Investigation of FDI-Pollution Tradeoff

Document Type

Article

Publication Date

5-3-2011

Publication Source

Applied Economics

Volume

44

Issue

20

Inclusive pages

2597-2606

Place of Publication

iFirst

ISBN/ISSN

00036846

Peer Reviewed

yes

Abstract

This article investigates the relationship between Foreign Direct Investment (FDI) and pollution measured by carbon dioxide (CO2) emissions. The results suggest that while lax environmental regulations might attract FDI, the foreign companies utilize less polluting technology as compared to local firms in low-income countries. Thus, FDI does not necessarily increase pollution levels in the host countries. The findings, therefore, simultaneously support the pollution haven and the pollution halo hypotheses

Disciplines

Economics

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