Pollution Haven or Halo? Evidence from Foreign Acquisitions in Indonesia

Inessa Love, Beata Javorcik and Arlan Brucal

No 306, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: The link between foreign ownership and environmental performance remains a controversial issue. This paper contributes to our understanding of this subject by analyzing the impact of foreign acquisitions on plant-level environmental performance. The analysis applies a difference-in-differences approach combined with coarsened exact matching to the data from the Indonesian Manufacturing Census for the period 1983-2001. It covers 264 acquisition cases where an acquired plant is observed a year before and at least three years after an ownership change and for which a carefully selected control plant exists. The results suggest that while foreign ownership increases the overall energy usage, due to expansion of output, it decreases the plant's energy intensity.

Date: 2017
New Economics Papers: this item is included in nep-ene, nep-env and nep-sea
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:306

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