Research on the Environmental Performance of Foreign Direct Investment Firms: The Case of Shanghai
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| Title | Research on the Environmental Performance of Foreign Direct Investment Firms: The Case of Shanghai
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| Author | Lin Liguo and Lou Guoqiang |
| Organization | School of Economics, Shanghai University of Finance and Economics;Institute for Advanced Research, Shanghai University of Finance and Economics |
| Email | lin.liguo@mail.shufe.edu.cn; lgqeco@mail.shufe.edu.cn |
| Key Words | FDI Firms; Environmental Performance; Pollution Discharged; Pollution Generated; Pollution Removed |
| Abstract | In this paper, by adopting firm-level pollution and financial data, we analyze the environmental performance of foreign direct investment (FDI) firms. Our study shows that FDI firms have better environmental performance than domestic firms; especially, FDI firms have less above-standard pollution, total pollution emitted and pollution generated in the production process; but as for the pollution removed at the end of pipe, domestic firms even remove more pollution. The results indicate that FDI firms have cleaner production process than domestic firms. We then use firms’ react to environmental penalties and the actual pollution levy rates to characterize firms’ environmental bargaining powers. We find that FDI firms’ above-standard pollution, total pollution emitted and pollution generated are not due to their different bargaining powers than domestic firms. Therefore, FDI firms’ better environmental performance should be ascribed to their clean and advanced production technology. |
| Serial Number | WP103 |
| Time | 2011-10-27 |
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