Keyword

Pollution Heaven Hypothesis, Foreign Direct Investment (FDI), environment, pollution control enforcement, laxity.

Abstract

This article reexamines the pollution heaven hypothesis, using measureable environmental indicators to quantify the laxity of pollution control enforcements. The article examines the impact of pollution control enforcements on FDI inflow in industries across the spectrum as well as individual industries. The study was done on a global platform with separate groups of ASEAN countries and domestically within Thailand. Data from the World Bank, UNCTAD and Thailand’s Board of Investment between years 2008 to 2013 were used with panel data regression. Mixed results were obtained; low levels of pollution control enforcements significantly attract FDI inflow to ASEAN countries and East Asia Pacific Region, while in the cases of Europe, Central Asia and Latin America no significant result was found. For Thailand, as a host country, firm-level evaluation procedures using pollution intensity value together with laxity of pollution control enforcements were evaluated. Foreign investors from various countries consider that low levels of pollution control enforcements in Thailand reflected significantly and attracted their investment decisions.


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