چکیده:
he inflow of foreign direct investment (FDI) increased rapidly during the late 1980s and the 1990s in almost every region of the worldrevitalizing the long and contentious debate about the costs and benefits ofFDI inflows. The "race-to-the-bottom" hypothesis was initially formulated in the context of local competition for investments within countries, wherethe decentralized environmental responsibilities gave in setting theirenvironmental standards in line with their priorities (WTO 1999). Most critics argue that increased competition for foreign direct investment couldlead to lowering of environmental standards and regulations (WB 2000).Furthermore, governments which attempt to maintain high standards will see their efforts undermined by the existence of less stringent regulationselsewhere. This will then lead to an overall lowering of environmentalstandards internationally (Jenkins et al. 2002). This paper aim is examination of "race-to-the-bottom" effects on the FDI inflow for 4 euro-Mediterranean countries, over 1980-2010. I have found that a decrease inthe environmental regulations stringency has positive and statistically significant effect on the FDI inflow to this region.
خلاصه ماشینی:
FDI, Environment, Environmental Regulation, Euro-Mediterranean Countries 1- Introduction The inflow of foreign direct investment (FDI) increased rapidly during the late 1980s and the 1990s in almost every region of the world revitalizing the long and contentious debate about the costs and benefits of FDI inflows.
However, controlling for unobserved state characteristics and adjusting their abatement cost measure for inter-state differences in industrial composition, Keller and Levinson (2003) find robust 1- Leonard (1988) found some evidence that governments used lenient environmental regulations to attract FDI in the 1970s, but he also found that incentives were not substantial enough to offset other determinants of location choice, particularly labor productivity, infrastructure and stability.
Race to the bottom hypothesis states that environmental standards will decline over time below socially acceptable levels as countries weaken regulations for competitive purposes and the equilibrium will be a world of 1- In case of local pollution in a closed economy with perfect competition, optimality requires that marginal abatement costs are equal to marginal damage.
For the first equation I assume that GDP per capita and inflow FDI are joint products, produced by country-specific factors: market size, environmental regulations, openness, unemployment rate and exchange rate.
An increase in the ores and metals exports reflects as the measure of environmental policy in the importer country of FDI for competitive purposes and the equilibrium will be a world of little or no regulation under the pressures of international competition.