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/lp/american-economic-association/us-environmental-regulation-and-fdi-evidence-from-a-panel-of-us-based-fKwcB9oI5c
- Publisher
- American Economic Association
- Copyright
- Copyright © 2010 by the American Economic Association
- Subject
- Articles
- ISSN
- 1945-7790
- eISSN
- 1945-7790
- DOI
- 10.1257/app.2.3.158
- Publisher site
- See Article on Publisher Site
Abstract
Abstract This paper measures the response of US-based multinationals to the Clean Air Act Amendments (CAAA). Using a panel of firm-level data over the period 1966–1999, I estimate the effect of regulation on a multinational's foreign production decisions. The CAAA induced substantial variation in the degree of regulation faced by firms, allowing for the estimation of econometric models that control for firm-specific characteristics and industrial trends. I find that the CAAA caused regulated multinational firms to increase their foreign assets by 5.3 percent and their foreign output by 9 percent. Heavily regulated firms did not disproportionately increase foreign investment in developing countries. (JEL F23, K32, L51, Q52, Q53, Q58 )
Journal
American Economic Journal: Applied Economics – American Economic Association
Published: Jul 1, 2010