EconPapers    
Economics at your fingertips  
 

The Dynamics of Foreign Direct Investments in Land and Pollution Accumulation

Simone Borghesi (), Giorgia Giovannetti (), Gianluca Iannucci () and Paolo Russu ()
Additional contact information
Paolo Russu: University of Sassari

Environmental & Resource Economics, 2019, vol. 72, issue 1, No 8, 135-154

Abstract: Abstract Following the recent increase of foreign direct investments in land, this paper studies their possible effects on the development of a local economy. To this aim, we use a two-sector model (external and local) with heterogeneous agents: external investors and local land owners. We assume that both sectors are negatively affected by pollution, but only the external sector is polluting. The local government can tax the external sector’s production activities to finance environmental defensive expenditures. We first examine the equilibria that emerge in the model from the dynamics of pollution and physical capital, and then investigate the conditions for the coexistence of the two sectors and the impact of the external sector on the revenues of the local population. Using numerical simulations, we show that a revenue-increasing path may occur only if the pollution tax is high enough and the impact of the external sector on pollution is low enough. Otherwise, foreign direct investments may end up impoverishing the local population.

Keywords: Foreign direct investments; Land grabbing; Two-sector model; Environmental negative externalities; Pollution taxation (search for similar items in EconPapers)
JEL-codes: D62 F21 O15 O41 Q50 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10640-018-0263-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The dynamics of foreign direct investments in land and pollution accumulation (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:72:y:2019:i:1:d:10.1007_s10640-018-0263-7

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-018-0263-7

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-12-07
Handle: RePEc:kap:enreec:v:72:y:2019:i:1:d:10.1007_s10640-018-0263-7