Do environmental characteristics influence foreign direct investment growth? A cross-national study, 1990-2000

The author engages several theoretical traditions in both economics and sociology to examine the impacts of levels of environmental efficiency and environmental institutions on foreign investment location in less-developed countries. Results from static score design panel OLS models of 52 countries provide mixed results. Less-developed countries with higher levels of carbon dioxide emissions per unit of gross domestic product attract higher levels of foreign investment, whereas less-developed countries with environmental ministries attract lower levels of foreign investment. Other independent variables - including sulfur dioxide emissions per unit of GDP, environmental treaty ratification, and environmental INGO presence/rate - show no statistically significant relationship with foreign investment location. The results underscore the continuing importance of the pollution havens hypothesis as well as the need for further research.

[1]  Jeffrey M. Wooldridge,et al.  Introductory Econometrics: A Modern Approach , 1999 .

[2]  Thomas Dietz,et al.  Environmentalism among nation-states , 1992 .

[3]  J. Roberts,et al.  Carbon intensity and economic development 1962–1991: A brief exploration of the environmental Kuznets curve , 1997 .

[4]  John W. Meyer,et al.  World Society and the Nation‐State , 1997, American Journal of Sociology.

[5]  Andrew K. Jorgenson,et al.  Globalization, Foreign Investment Dependence and Agriculture Production: Pesticide and Fertilizer Use in Less-developed Countries, 1990-2000 , 2008 .

[6]  C. Chase-Dunn,et al.  Transnational corporations and underdevelopment , 1985 .

[7]  Jeffrey D. Kentor,et al.  The Long‐Term Effects of Foreign Investment Dependence on Economic Growth, 1940–19901 , 1998, American Journal of Sociology.

[8]  J. Clapp.  Foreign direct investment in hazardous industries in developing countries: Rethinking the debate , 1998 .

[9]  Andrew K. Jorgenson.  Global Warming and the Neglected Greenhouse Gas: A Cross-National Study of the Social Causes of Methane Emissions Intensity, 1995 , 2006 .

[10]  Tom M. L. Wigley,et al.  Global and regional anthropogenic sulfur dioxide emissions , 2001 .

[11]  Edward M. Crenshaw,et al.  Foreign Investment as a Dependent Variable: Determinants of Foreign Investment and Capital Penetration in Developing Nations, 1967–1978 , 1991 .

[12]  R. Frey,et al.  The Transfer of Core-Based Hazardous Production Processes to the Export Processing Zones of the Periphery: The Maquiladora Centers of Northern Mexico , 2003 .

[13]  Andrew K. Jorgenson,et al.  Sectoral Foreign Investment and Nitrous Oxide Emissions: A Quantitative Investigation , 2009 .

[14]  Elhanan Helpman,et al.  The Politics of Free Trade Agreements , 1993 .

[15]  Stephen G. Bunker,et al.  Modes of Extraction, Unequal Exchange, and the Progressive Underdevelopment of an Extreme Periphery: The Brazilian Amazon, 1600-1980 , 1984, American Journal of Sociology.

[16]  C. Chase-Dunn.  The Effects of International Economic Dependence on Development and Inequality: A Cross-National Study , 1975 .

[17]  Neal D. Woods.  Interstate Competition and Environmental Regulation: A Test of the Race‐to‐the‐Bottom Thesis , 2006 .

[18]  Andrew K. Jorgenson.  Consumption and Environmental Degradation: A Cross-National Analysis of the Ecological Footprint , 2003 .

[19]  R. Frey,et al.  The international traffic in pesticides , 1995 .

[20]  Ann M. Hironaka,et al.  The Effects of World Society on Environmental Protection Outcomes , 2005 .

[21]  Thomas J. Burns,et al.  Position in the World-System and National Emissions of Greenhouse Gases , 1997 .

[22]  Ingo Walter,et al.  Environmental policies in developing countries. , 1979 .

[23]  J. Roberts,et al.  Social Roots of Global Environmental Change: A World-Systems Analysis of Carbon Dioxide Emissions , 2003, Globalization and the Environment.

[24]  J. Jenkins,et al.  World Handbook of Political Indicators IV , 2007 .

[25]  Andrew K. Jorgenson,et al.  Globalization, Foreign Investment Dependence, and Agriculture Production: A Cross-National Study of Pesticide and Fertilizer Use Intensity in Less-developed Countries, 1990-2000 , 2007 .

[26]  C. Kolstad,et al.  Do Lax Environmental Regulations Attract Foreign Investment? , 1998 .

[27]  Andrew K. Jorgenson,et al.  Unpacking the Ecological Footprint of Nations , 2005 .

[28]  Andrew K. Jorgenson.  The Transnational Organization of Production and Environmental Degradation: A Cross‐National Study of the Effects of Foreign Capital Penetration on Water Pollution Intensity, 1980–1995* , 2006 .

[29]  G. Firebaugh.  Growth Effects of Foreign and Domestic Investment , 1992, American Journal of Sociology.

[30]  Peter Thompson,et al.  Trade and Environmental Quality: A Review of the Evidence , 1996 .

[31]  Andrew K. Jorgenson,et al.  Foreign Investment Dependence and the Environment: An Ecostructural Approach , 2007 .

[32]  David Wheeler,et al.  Trade Policy and Industrial Pollution in Latin America: Where Are the Pollution Havens? , 1993 .

[33]  P. Grimes,et al.  Exporting the Greenhouse: Foreign Capital Penetration and CO? Emissions 19801996 , 2003 .

[34]  Andrew K. Jorgenson.  The Effects of Primary Sector Foreign Investment on Carbon Dioxide Emissions from Agriculture Production in Less-Developed Countries, 1980-99 , 2007 .

[35]  Jackie Smith,et al.  The Uneven Geography of Global Civic Society: National and Global Influences on Transnational Association , 2005 .

[36]  Evan Schofer,et al.  Environmentalism, Globalization and National Economies, 1980-2000 , 2006 .

[37]  David J. Molina,et al.  A Comment on Whether Maquiladoras Are in Mexico for Low Wages or to Avoid Pollution Abatement Costs , 1993 .

[38]  G. Firebaugh.  Does Foreign Capital Harm Poor Nations? New Estimates Based on Dixon and Boswell's Measures of Capital Penetration , 1996, American Journal of Sociology.

[39]  David John Frank.  Science, Nature, and the Globalization of the Environment, 1870–1990 , 1997 .

[40]  W. J. Dixon,et al.  Dependency, Disarticulation, and Denominator Effects: Another Look at Foreign Capital Penetration , 1996, American Journal of Sociology.

[41]  D. Wimberley,et al.  Effects of Foreign Investment, Exports, and Economic Growth on Third World Food Consumption , 1992 .

[42]  C. Chase-Dunn,et al.  Trade Globalization since 1795: Waves of Integration in the World-System , 2000, American Sociological Review.

[43]  R. J. Ross,et al.  Global Capitalism and the Flow of Foreign Direct Investment to Non-Core Nations, 1980-1996: A Quantitative, Cross-National Analysis , 2003 .

[44]  Ann Hironaka,et al.  The Nation-State and the Natural Environment over the Twentieth Century , 2000, American Sociological Review.

[45]  Eric Neumayer,et al.  Pollution Havens: An Analysis of Policy Options for Dealing with an Elusive Phenomenon , 2001 .

[46]  Andrew K. Jorgenson.  Unequal Ecological Exchange and Environmental Degradation: A Theoretical Proposition and Cross‐National Study of Deforestation, 1990–2000* , 2006 .