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Moving to greener pastures: multinationals and the pollution-haven hypothesis

Eskeland, Gunnar S.*Harrison, Ann E.
Authors registered in the RePEc Author Service: Gunnar S. Eskeland () and Ann E. Harrison ()

No 1744, Policy Research Working Paper Series from The World Bank

Abstract: Are multinationals flocking to pollution havens in developing countries? Using data from four developing countries (Cote d'Ivoire, Mexico, Morocco, and Venezuela), the authors examine the pattern of foreign investment. They find almost no evidence that foreign investors are concentrated in dirty sectors. They also examine the behavior of multinationals doing business in these four countries, testing whether there is any tendency for foreign firms to pollute more or less than their host country counterparts. To do this, they use consumption of energy and dirty fuels as a proxy for pollution intensity. They find that foreign plants in these four developing countries are significantly more energy-efficient and use cleaner types of energy than their domestic counterparts. The authors conclude with an analysis of US outbound investment between 1982 and 1994. They reject the hypothesis that the pattern of US foreign investment is skewed toward industries in which the cost of pollution abatement is high.

Keywords: Water and Industry; Environmental Economics&Policies; Pollution Management&Control; Economic Theory&Research; Energy and Environment; Decentralization (search for similar items in EconPapers)
Date: 1997-03-31
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Journal Article: Moving to greener pastures? Multinationals and the pollution haven hypothesis (2003) Downloads
Working Paper: Moving to Greener Pastures? Multinationals and the Pollution Haven Hypothesis (2002) Downloads
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