The Benefits of Trade and Foreign Direct Investment
Publication Year: 2011
Published by: University of Michigan Press
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Chapter 1: Theoretical Contentions and Analytical Approaches
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The debate over the effects of trade liberalization and foreign direct investment (FDI), or economic “globalization,” on environmental protection has generated intense scrutiny from environmentalists, policymakers, and academics alike. On the one hand, many economists and globalization proponents contend that the economic gains captured from free trade and FDI offset
Chapter 2: Debunking the “Pollution-Haven” and “Race-to-the-Bottom” Hypotheses
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This book grounds its analyses in the “pollution-haven” (PH) and “race-to-the-bottom” (RTB) propositions. In doing so, we provide support for the “trading-up” and “investing-up” arguments, and the general notion that economic globalization can be beneficial to the natural environment.1 This chapter details our primary ....
Chapter 3: Environmental Pollution and Regulation in China
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This chapter introduces China’s perilous environmental situation and the steps the Chinese government has taken to address what some have called “one of the greatest environmental threats the earth has ever faced.” 1 We highlight the actors involved in the system of Chinese environmental protection, with particular attention to the limited role of the environmental protection agencies in ...
Chapter 4: Pollution Havens and Racing to the Bottom: A Provincial-Level Analysis
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This chapter provides an empirical test of the pollution-haven and race-to-the-bottom hypotheses among Chinese provinces. According to the pollution-haven hypothesis, foreign investors have financial incentives to seek out areas of lax environmental regulation to establish production operations.1 The concentration of pollution-intensive investment in these areas turns them into ...
Chapter 5: Do Chinese Provinces “Trade Up” and “ Invest Up”?
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In this chapter, we analyze how regulatory pressure in primary export markets and FDI source countries affects Chinese provincial environments. Our empirical results demonstrate that provinces that export to or receive the bulk of their investment from countries with superior environmental standards also tend to be more environmentally responsible. In a refinement to our original argument, we...
Chapter 6: How Do Firms Behave? Survey Evidence from Business Executives
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This chapter supplements our provincial-level analyses with a survey of Chinese business executives’ attitudes toward environmental protection and the motivations, costs, and benefits of implementing environmentally sound business strategies. The survey results lend substantial support to our key hypotheses about the ratcheting-up effect of trade and FDI on environmental standards...
Chapter 7: Asia Pulp & Paper: Local Standards, World Markets, and Environmental Protection
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Through analyses of Chinese provincial-level data and survey data, the previous chapters suggest that economic integration with developed-world markets encourages companies to adopt more sustainable business practices. By ensuring further development and innovation of environmental abatement technology and by facilitating the transfer of corporate norms of environmental ...
Chapter 8: Implications, Caveats, and Future Research Questions
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This project examines the impact of trade and foreign investment on the environment in China, a country that is undergoing both rapid industrialization and unprecedented environmental degradation. Our empirical analyses provide a strong critique of the race-to-the-bottom and pollution-haven arguments.Rather than leading to further environmental damage, China’s economic ...
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Page Count: 264
Illustrations: 15 Figures, 26 Tables
Publication Year: 2011