Environmental Regulation and FDI Inflows: Evidence from OECD countries
Keywords
Loading...
Authors
Issue Date
2025-07-07
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
This thesis investigates the effect of environmental regulations on foreign direct investment (FDI) inflows. Existing literature provides mixed evidence, and this thesis aims to contribute to the academic debate. It does this by disaggregating environmental regulations into market-based, nonmarket-based and technology support policies and conducting a regional, sectoral and income group analysis. A two-way fixed effects model is employed on a panel dataset of 33 OECD countries from 2002 to 2020. The results show that there is no significant overall effect of environmental policy stringency (EPS) on FDI inflows. However, the heterogeneity analysis reveals that there is significant heterogeneity across regions and sectors. In some regions, EPS and its subcomponents do attract FDI and in other regions there is no significant relationship. Furthermore, the sectoral analysis shows that in most sectors there is no significant relationship, in other sectors the results reveal that there are significant positive and negative effects of EPS on FDI inflows. These results offer important insights into the relationship between environmental regulations and FDI, as the relationship is shown to be context dependent.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen