Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?
Abbreviated Journal Title
J. Urban Econ.
foreign direct investment; environmental regulations; propensity score; matching; AIR-QUALITY REGULATION; PROPENSITY SCORE; LOCATION DECISIONS; DIRECT-INVESTMENT; COUNT DATA; CAUSAL; POLICY; ESTIMATOR; PROGRAMS; STATES; Economics; Urban Studies
Whether environmental regulations alter capital flows remains a hotly debated issue. This paper uses county-level data to examine the location decisions of domestic and foreign firms in a single empirical model and tests for asymmetries by firm origin in the degree to which capital flows are influenced by environmental standards. We find that while domestic firms are influenced by environmental regulations, foreign firms are not. Since the benefits of foreign investment are well-documented-foreign plants typically provide more jobs and increase local wages by more than domestic plants-this result suggests a double-dividend is available: foreign plants provide an economic stimulus and are not unduly influenced by environmental protections. (C) 2004 Elsevier Inc. All rights reserved.
Journal of Urban Economics
"Effects of environmental regulation on foreign and domestic plant births: is there a home field advantage?" (2004). Faculty Bibliography 2000s. 4551.