FDI And Environmental Stringency:An Evidence Of Pollution Haven Hypothesis

• Main Authors: Liu, Yanliang, 劉彥良
• Other Authors: Hsu, Chingchun
• Format: Others
• Language: en_US
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/36514767439880164706

碩士 === 國立宜蘭大學 === 應用經濟學系碩士班 === 100 === The trend towards globalization of economic development, foreign direct investment, FDI plays an important role for multinational corporations’ growth strategy. Firms face a district choice decisions of FDI usually considers its own strengths and the operating-related factors, especially the host country's investment risk and environmental policy. This study of environmental norms in the countries concerned and the country risk for foreign investment decisions associated with multinational corporations to observe Taiwanese listed companies’ foreign investment location decision-making behavior. We build the national-level panel count data of FDI to test whether the lower standard of environmental norms in host countries are able to attract corporations’ direct investments during the period of 1997-2007. In addition, this study takes both the endogeneity issue of environmental stringency and industrial characteristics of Taiwanese listed companies into account. Empirical results show that Taiwanese listed companies prefer to invest countries with more rather than less stringent environmental regulations when regarding environmental regulations as an endogenous variable. This implies that the pollution haven hypothesis cannot be confirmed with in this paper. While the industrial characteristics of Taiwanese listed companies perhaps cannot influence the pollution haven effect. Furthermore, Taiwanese listed companies tend to invest the host countries with higher quality of infrastructure and adopt more defensive FDI strategy.