Do environmental regulations matter on Spanish foreign investment? A multisectorial approach

• Published in: Environmental science and pollution research international Vol. 28; no. 41; pp. 57781 - 57797
• Main Authors: Cansino, Jose M., Carril-Cacia, Federico, Molina-Parrado, Juan C., Román-Collado, Rocío
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.11.2021; Springer Nature B.V
• Subjects: Aquatic Pollution; Atmospheric Protection/Air Quality Control/Air Pollution; Earth and Environmental Science; Ecotoxicology; Environment; Environmental Chemistry; Environmental Health; Environmental protection; Environmental regulations; Environmental science; International financing; Manufacturing; Manufacturing industry; Outsourcing; Professional services; Research Article; Waste Water Technology; Water Management; Water Pollution Control; Foreign direct investment; Gravity model; Environmental regulations; Pollution haven hypothesis; Spain
• ISSN: 0944-1344; 1614-7499
• DOI: 10.1007/s11356-021-14635-6

A gravity model is used to investigate the impact of the stringency and enforcement of the environmental regulation on Spanish investment flows abroad during the period 2008–2018. From the pollution haven hypothesis’ (PHH) perspective, the research tests if offshoring and outsourcing processes from Spanish multinational enterprises (MNEs) were due to movements through FDI of high-polluting industries seeking refuge in countries with a low standard of legal environmental protection framework. The analysis includes FDI into primary, manufacturing, construction, wholesale and retail, professional services, leisure services, utilities, and other services. When no sectoral approach is developed, PHH seems to be not held. However, the multisectoral perspective states that MNEs in primary and manufacturing sectors seek refuge in countries with a low standard of legal environmental protection framework.