Exporting Pollution: Where Do Multinational Firms Emit CO2?
Fisher College of Business Working Paper No. 2018-03-20
Charles A. Dice Working Paper No. 2018-20
European Corporate Governance Institute – Finance Working Paper 717/2020
68 Pages Posted: 22 Sep 2018 Last revised: 7 Dec 2020
Itzhak Ben-David
Ohio State University (OSU) - Department of Finance; National Bureau of Economic Research (NBER)
Yeejin Jang
UNSW Australia Business School, School of Banking and Finance
Stefanie Kleimeier
Maastricht University - Department of Finance; Open Universiteit; Univ. of Stellenbosch Business School
Michael Viehs
European Centre for Corporate Engagement (ECCE)
There are 2 versions of this paper
Exporting Pollution: Where Do Multinational Firms Emit CO2?
Exporting Pollution: Where Do Multinational Firms Emit Co2?
Date Written: November 30, 2020
Abstract
Despite widespread awareness of the detrimental impact of CO2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel microdata about multinational firms’ CO2 emissions across countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are largely driven by tightened environmental policies in home countries that incentivize firms to pollute abroad rather than lenient foreign policies that attract those firms. Although firms headquartered in countries with strict domestic environmental policies are more likely to export pollution to foreign countries, they nevertheless emit somewhat less overall CO2 globally.
Keywords: Pollution, Production, Climate Change, CO2 Emission, Environmental Regulation
JEL Classification: F23, N50, O13, P18, Q56, R11
Suggested Citation: Suggested Citation
Itzhak Ben-David (Contact Author)

Ohio State University (OSU) - Department of Finance ( email )
2100 Neil Avenue
Fisher 700D
Columbus, OH 43210-1144
United States
773 988 1353 (Phone)
HOME PAGE: http://https://u.osu.edu/ben-david.1/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
HOME PAGE: http://fisher.osu.edu/fin/faculty/Ben-David/
Stefanie Kleimeier
Maastricht University - Department of Finance ( email )
Maastricht, 6200 MD
Netherlands
Open Universiteit
Valkenburgerweg 177
Heerlen, 6419 AT
Netherlands
Univ. of Stellenbosch Business School
Carl Cronjé Drive
CAPE TOWN, Cape Town 7535
South Africa
Michael Viehs
European Centre for Corporate Engagement (ECCE) ( email )
Tongersestraat 53
Maastricht, 6211LM
Netherlands
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