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FOREIGN DIRECT INVESTMENT AND ENVIRONMENTAL REGULATIONS: A SURVEY
Authors:Ayse M. Erdogan
Affiliation:Department of Economics, Rochester Institute of Technology
Abstract:This paper presents a survey of the literature on the relationship between foreign direct investment (FDI) and environmental policy. First, I focus on empirical studies that analyse the impact of environmental costs on foreign investment locations. Next, I review the main studies that attempt to explain the lack of evidence for the pollution haven hypothesis. Then, I discuss the literature on the impact of FDI on local environmental regulations by concentrating on two recent political economy models. Finally, I conclude by summarizing the main findings of the literature and suggesting some future research directions.
Keywords:Environmental regulations  Foreign direct investment
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