Do stringent environmental policies deter FDI? M&A versus Greenfi eld

Sylwia Bialek and Alfons Weichenrieder

VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy from Verein für Socialpolitik / German Economic Association

Abstract: This study examines how environmental stringency affects the location decision of foreign direct investments. We analyze a fi rm-level data set on German outbound FDI and innovate on previous studies by controlling for the mode of entry and applying a mixed-logit analysis. The results show that Greenfi eld projects react to environmental regulation in a strongly different way than M&As. We fi nd robust support for pollution haven hypothesis for polluting Green fields. M&A investments in low polluting industries, on the other hand, seem to be attracted by stricter environmental regulation. We introduce a novel instrumental variable for environmental stringency and apply it to verify the results.

JEL-codes: F20 Q50 Q58 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Do Stringent Environmental Policies Deter FDI? M&A versus Greenfield (2021)
Working Paper: Do Stringent Environmental Policies Deter FDI? M&A versus Greenfield (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc15:113179

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