Does Environmental Quality Influence FDI Inflows? A Panel Data Analysis for Indian States

Neelakanta N.T., Haripriya Gundimeda and Vinish Kathuria

Review of Market Integration, 2013, vol. 5, issue 3, 303-328

Abstract: Increased integration between the developed and developing countries has seen substantial decrease in trade-related barriers. In addition, there is a debate that developing countries tend to lower the environmental standards to attract more foreign direct investment (FDI). In this context, the objective of this article is to examine the relationship between FDI and environmental status in different Indian states. Using data for the period 1996–2006 covering 16 states in India, we test for the pollution haven hypothesis (PHH) that is, if air quality has a role in influencing FDI in Indian states. Our result does not support that FDI flows into the states with poor air quality. Other economic, demographic and geographic variables play a significant role in attracting FDI.

Keywords: Environmental quality; pollution; foreign direct investment; air quality index (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0974929214538362 (text/html)

Related works:
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:sae:revmar:v:5:y:2013:i:3:p:303-328

DOI: 10.1177/0974929214538362

Access Statistics for this article

More articles in Review of Market Integration from India Development Foundation
Bibliographic data for series maintained by SAGE Publications ().