Agglomeration effects in foreign direct investment and the pollution haven hypothesis

Does environmental regulation impair international competitiveness of pollution-intensive industries to the extent that they relocate to countries with less stringent regulation, turning those countries into "pollution havens"? We test this hypothesis using panel data on outward foreign direct investment (FDI) flows of various industries in the German manufacturing sector and account for several econometric issues that have been ignored in previous studies. Most importantly, we demonstrate that externalities associated with FDI agglomeration can bias estimates away from finding a pollution haven effect if omitted from the analysis. We include the stock of inward FDI as a proxy for agglomeration and employ a GMM estimator to control for endogenous time-varying determinants of FDI flows. Furthermore, we propose a difference estimator based on the least polluting industry to break the possible correlation between environmental regulatory stringency and unobservable attributes of FDI recipients in the cross-section. When accounting for these issues we find robust evidence of a pollution haven effect for the chemical industry. © 2008 Springer Science+Business Media B.V.

Air pollution, Fuel Usage and Health Outcomes in Madre de Dios, Peru: a Comparative Cross Sectional Study

Air pollution is a common problem. Particulate matter generated from air pollution has been tied to adverse health outcomes associated with cardiovascular disease. Biomass fuels are a specific contributor to increased particulate matter and arise as a result of indoor heating, cook stoves and indoor food preparation. This is a two part cross sectional study looking at communities in the Madre de Dios region. Survey data was collected from 9 communities along the Madre de Dios River. Individual level household PM2.5 was also collected as a means to generate average PM data stratified by fuel use. Data collection was affected by a number of outside factors, which resulted in a loss of data. Results from the cross-sectional study indicate that hypertension is not a significant source of morbidity. Obesity is prevalent and significantly associated with kitchen venting method indicating a potential relationship.

Hepatic Responses of Juvenile Fundulus heteroclitus from Pollution-adapted and Nonadapted Populations Exposed to Elizabeth River Sediment Extract.

Atlantic killifish (Fundulus heteroclitus) inhabiting the Atlantic Wood Industries region of the Elizabeth River, Virginia, have passed polycyclic aromatic hydrocarbon (PAH) resistance to their offspring as evidenced by early life stage testing of developmental toxicity after exposure to specific PAHs. Our study focused on environmentally relevant PAH mixtures in the form of Elizabeth River sediment extract (ERSE). Juvenile (5 month) F1 progeny of pollution-adapted Atlantic Wood (AW) parents and of reference site (King's Creek [KC]) parents were exposed as embryos to ERSE. Liver alterations, including nonneoplastic lesions and microvesicular vacuolation, were observed in both populations. ERSE-exposed KC fish developed significantly more alterations than unexposed KC fish. Interestingly, unexposed AW killifish developed significantly more alterations than unexposed KC individuals, suggesting that AW juveniles are not fully protected from liver disease; rapid growth of juvenile fish may also be an accelerating factor for tumorigenesis. Because recent reports show hepatic tumor formation in adult AW fish, the differing responses from the 2 populations provided a way to determine whether embryo toxicity protection extends to juveniles. Future investigations will analyze older life stages of killifish to determine differences in responses related to chronic disease.