FDI and the Capital Intensity of “Dirty” Sectors外文原文.pdf

Review of Development Economics, 9(4), 530–548, 2005 FDI and the Capital Intensity of “Dirty” Sectors: A Missing Piece of the Pollution Haven Puzzle Matthew A. Cole and Robert J. R. Elliott* Abstract In an increasingly integrated world, falling trade barriers mean that the role environmental regulations play in shaping a country’s comparative advantage is greater than ever. This has lead to fears that “dirty” indus- tries will relocate to developing regions where environmental regulations may be less stringent. A number of reasons have been offered to explain why, despite anecdotal evidence and the predictions of theoretical studies, little empirical verification for the existence of pollution havens has been found. Little attention, however, has been paid to the capital intensity of pollution intensive sectors. We investigate the relationship between US outward FDI and factor endowments across sectors to two developing countries. We highlight the role of capital and believe it partially explains why pollution havens are not more widespread. Our approach also highlights those countries that are likeliest to become pollution havens. A multivariate analy- sis reveals some evidence of pollution haven consistent behavior. 1. Introduction In an increasingly integrated world, falling trade barriers mean that the role environ- mental regulations play in shaping a country’s comparative advantage is greater than ever. If international competitiveness is influenced by differences in regulations, then changing trade patterns or the relocation of firms (foreign direct investment) may result in protectionist arguments for lower environmental regulations.1 At the same time, in the US, the North American Free Trade Agreement (NAFTA) has rekindled fears that pollution intensive multinational corporations (MNCs) will relocate to Mexico where environment