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9 - The Effects of Environmental Costs on Public Support for Foreign Direct Investment

Differences Between the United States and India

from Part III - Bottom-Up: Private Sector and Civil Society Initiatives on the Sustainable Development Goals

Published online by Cambridge University Press:  18 September 2020

By
Hye-Sung Kim  and
Youngchae Lee
Edited by
Cosimo Beverelli ,
Jürgen Kurtz  and
Damian Raess
Cosimo Beverelli
Affiliation:
World Trade Organization
Jürgen Kurtz
Affiliation:
European University Institute, Florence
Damian Raess
Affiliation:
World Trade Institute, University of Bern
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Summary

Is economic development a prerequisite for concern over environmental issues? The existing literature has yet to reach an empirical consensus on this question. To revisit this important topic, we offer new experimental evidence by conducting online survey experiments in one developed country (the United States) and one developing country (India). We investigate how providing information on the negative environmental costs of foreign direct investment (FDI) affects people’s support of FDI, and how these effects differ between residents of the United States and India. The results of our experiment show that among residents of the United States, being presented with information about the environmental costs of FDI sharply reduces support for FDI, while a substantially weaker effect of the environmental costs of FDI was observed among residents of India. Also, respondents from the United States are more concerned about environmental damage caused by FDI in their own city than in a distant location, while this pattern is not observed among respondents from India. These results are consistent with the claim that economic prosperity and wealth are prerequisites for environmental concern.

Keywords

foreign direct investmentenvironmental costsdeveloped countriesdeveloping countriespublic opinionexperimentsUnited StatesIndia
Type
Chapter
Information
International Trade, Investment, and the Sustainable Development Goals
World Trade Forum
 , pp. 270 - 309
Publisher: Cambridge University Press
Print publication year: 2020

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