Heterogeneous impacts of environmental regulation on foreign direct investment: do environmental regulation affect FDI decisions?

2021 ◽  
Author(s):  
Shah Fahad ◽  
Dongbei Bai ◽  
Lingcai Liu ◽  
Zulfiqar Ali Baloch
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Regulation ◽  
Direct Investment

Environmental Regulation: An Incentive for Foreign Direct Investment

2011 ◽  
Vol 19 (3) ◽  
pp. 568-578 ◽  
Author(s):  
Bouwe R. Dijkstra ◽  
Anuj Joshua Mathew ◽  
Arijit Mukherjee
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Regulation ◽  
Direct Investment

scholarly journals The role of environmental regulation, industrial upgrading and resource allocation on foreign direct investment: Evidence from 276 Chinese cities

2021 ◽  
Author(s):  
Wei Qiu ◽  
Yaojun Bian ◽  
Jinwei Zhang ◽  
Muhammad Irfan
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Regulation ◽  
Direct Investment ◽  
Inhibitory Effects ◽  
Industrial Upgrading ◽  
Resource Configuration ◽  
Negative Space ◽  
The Impact ◽  
Reasonable Use

Abstract Environmental pollution is becoming more and more prevalent in China, accompanied by the excessive expansion of the country's foreign direct investment in the scale of resource-based industries. This article uses the panel data of 276 prefecture-level cities in China from 2003 to 2016 to estimate the impact of environmental regulation on foreign direct investment by employing the Spatial Durbin model. The empirical results show that: firstly, environmental regulation, and foreign direct investment have an obvious spatial correlation. Secondly, environmental regulation significantly inhibits foreign direct investment and has significant negative space spillover. Thirdly, non-eastern cities' environmental regulation has significantly greater inhibitory effects on foreign direct investment than eastern cities, and the key cities' environmental regulation has greater inhibitory effects than ordinary cities. Finally, from the perspective of industrial upgrading and resource configuration, environmental regulation has significantly promoted foreign direct investment and have significant negative space spillovers. Therefore, the reasonable use of environmental regulatory measures through industrial upgrading and resource configuration to attract clean, capital-intensive and technology-intensive enterprises and to achieve the effect of "decontamination and clean" for foreign-funded enterprises is critical.

scholarly journals Environmental Regulation and Foreign Direct Investment: Evidence from China’s Eleventh and Twelfth Five-Year Plans

2020 ◽  
Vol 12 (6) ◽  
pp. 2528 ◽  
Author(s):  
Yuqing Ge ◽  
Yucai Hu ◽  
Shenggang Ren
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Policy ◽  
Environmental Regulation ◽  
Direct Investment ◽  
So2 Emissions ◽  
Negative Effects ◽  
Environmental Enforcement ◽  
Fdi Inflows ◽  
Pollution Haven ◽  
Pollution Haven Effect

This paper investigates environmental regulation and its impact on inward foreign direct investment (FDI) in developing countries. Based on the Chinese province-industry-level panel data in the period 2001 to 2015, we use a difference-in-difference-in-differences (DDD) model to evaluate pollution haven behavior in the context of China’s 11th and 12th Five-Year Plans SO2 emissions reduction policy. The results show that the policy leads to fewer FDI inflows to its highly-polluting industries in provinces with tougher pollution reduction targets. In addition, the environmental policy has significantly inhibited FDI inflows in provinces with stricter environmental enforcement, while investment in provinces with worse environmental enforcement is insensitive to environmental policy. These findings are consistent with pollution haven behavior. In contrast, FDI in industries with high levels of technology is not significantly influenced by the policy, whereas the FDI in industries with low levels of technology shows a negative response to environmental policy. This is overall evidence confirming a pollution haven effect (PHE), although technology differences could alleviate the negative effects of environmental regulation on inward FDI.

scholarly journals Do Stringent Environmental Policies Deter FDI? M&A versus Greenfield

2021 ◽  
Author(s):  
Sylwia Bialek ◽  
Alfons J. Weichenrieder
Keyword(s):  
Foreign Direct Investment ◽  
Mergers And Acquisitions ◽  
Environmental Regulation ◽  
Direct Investment ◽  
Environmental Policies ◽  
Purchase Price ◽  
Firm Level ◽  
Mode Of Entry ◽  
Heterogeneous Effects ◽  
Significant Difference

AbstractStrict environmental regulation may deter foreign direct investment (FDI). The paper develops the hypothesis that regulation predominantly discourages FDI that is conducted as Greenfield investment rather than mergers and acquisitions (M&A). The hypothesis is tested with German firm-level FDI data. Empirically, stricter regulation reduces new Greenfield projects in polluting industries, but indeed has a much smaller impact on the number of M&As. This significant difference is compatible with the fact that existing operations often benefit from grandfathering rules, which provide softer regulation for pre-exisiting plants, and with the expectation that for M&As part of the regulation is capitalized in the purchase price. The heterogeneous effects help explaining mixed results in previous studies that have neglected the mode of entry.

scholarly journals Environmental Regulation, Outward Foreign Direct Investment, and Low-Carbon Innovation: An Empirical Study Based on Provincial Spatial Panel Data in China

2021 ◽  
Vol 2021 ◽  
pp. 1-14
Author(s):  
Chaojun Yang ◽  
Liju Liu ◽  
Wenke Yang ◽  
Tanveer Ahmed
Keyword(s):  
Foreign Direct Investment ◽  
Environmental Regulation ◽  
Direct Investment ◽  
Environmental Control ◽  
Spillover Effects ◽  
Outward Foreign Direct Investment ◽  
Low Carbon ◽  
Regional Heterogeneity ◽  
Spatial Panel Data ◽  
The Relationship

The low-carbon transformation has turned out to be a challenging task faced by government agencies, enterprises, and society because of the global warming. Endorsing the expansion of the low-carbon revolution is considered as an essential measure for low-carbon alteration and advancement. Therefore, articulating realistic environmental control strategies intended to enhance the motivation level of low-carbon innovation, though outward foreign direct investment (OFDI) can produce direct and indirect influences on the growth of low-carbon innovation. According to the data of 30 provinces of China from 2004 to 2017, the relationship among environmental regulation, OFDI, and low-carbon innovation was analyzed using the spatial econometric model. Based on the analyzed data, the following conclusions were drawn. (i) From the national and regional perspectives, China’s low-carbon innovation takes understandable agglomeration features in the longitudinal dimension. In addition, environmental regulation plays a key role in promoting low-carbon innovation and regional heterogeneity. (ii) Environmental regulation might force enterprises outward foreign direct investment efficiently and increase the level of OFDI that will be capable of promoting low-carbon innovation. (iii) OFDI acts as an intermediary in the relationship between environmental regulation and low-carbon innovation, and this role has regional heterogeneity. (iv) There are significant spatial spillover effects of environmental regulation and OFDI on low-carbon innovation, environmental regulation on OFDI, and the intermediary effect of OFDI on environmental regulation and low-carbon innovation. This study supplements our understanding of the relationship between environmental regulation and OFDI, in addition to low-carbon innovation, which provides illumination for enterprise practice, as well as decision-makers.

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