#2343. Do Stringent Environmental Policies Deter FDI? M&A versus Greenfield

August 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript4500 $

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Journal’s subject area:
Economics and Econometrics;
Management, Monitoring, Policy and Law;
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Abstract:
Strict environmental regulation may deter foreign direct investment (FDI). The paper develops the hypothesis that regulation predominantly discourages FDI that is conducted as Greenfield investment rather than mergers and acquisitions (M&A). The hypothesis is tested with German firm-level FDI data. Empirically, stricter regulation reduces new Greenfield projects in polluting industries, but indeed has a much smaller impact on the number of M&As.
Keywords:
Entry mode; Environmental stringency; Foreign direct investment; Pollution haven hypothesis

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