Environmental regulation and foreign direct investment: Evidence from South Korea

• 成果类型: Article
• 署名作者: Chung, Sunghoon
• 署名单位: Korea Development Institute (KDI)
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2014.01.003
• 发表日期: 2014
• 页码: 222-236
• 关键词: Pollution haven hypothesis; environmental regulation; comparative advantage; Foreign direct investment; South Korea

摘要

This paper studies how environmental regulation shapes the pattern of foreign direct investment (FDI), and thereby assesses the pollution haven hypothesis. Conflicting results exist in the case studies examining the most advanced countries, partly due to the deterrent effect of clean technology adoptions on industry migration. To minimize the clean technology effect, we examine the pattern of South Korean FDI over 2000-2007, the period that Korean firms relied on old production technologies despite facing rapidly strengthened environmental standards. A difference-in-differences type identification strategy circumvents other potential confounders. We find strong evidence that polluting industries tend to invest more in countries with taxer environmental regulations in terms of both the amount of investment (intensive margin) and the number of new foreign affiliates (extensive margin). A similar finding is obtained when imports are analyzed. (C) 2014 Elsevier B.V. All rights reserved.