Ulrich J. Wagner|Christopher Timmins
Agglomeration Effects in Foreign Direct Investment and the Pollution Haven Hypothesis
Universidad Carlos III de Madrid|Duke University
environmental regulation impair international competitiveness pollutionintensive industries extent relocate countries less stringent regulation turning countries pollution havens test hypothesis using panel data outward foreign direct investment fdi flows various industries german manufacturing sector account several econometric issues ignored previous studies importantly demonstrate externalities associated fdi agglomeration bias estimates away finding pollution effect omitted analysis include stock inward fdi proxy agglomeration employ gmm estimator control endogenous timevarying determinants fdi flows furthermore propose difference estimator based least polluting industry break possible correlation environmental regulatory stringency unobservable attributes fdi recipients crosssection accounting issues find robust evidence pollution effect chemical industry