Foreign Direct Investment and the Environment, the Mitigating Influence of Institutional and Civil Society Factors, and Relationships Between Industrial Pollution and Human Health

Abstract

The author engages multiple theoretical orientations to examine the effects of foreign direct investment (FDI) on industrial organic water pollution intensity in less-developed countries as well as the potential mitigating impacts of institutional and civil society factors. Results of panel regression analyses indicate that within less-developed countries, industrial water pollution is positively associated with FDI in the manufacturing sector. However, a stronger presence of environmental international nongovernmental organizations and the existence of environmental ministries both attenuate the environmental harms of secondary sector foreign investment, whereas state strength appears to have no such mitigating influence. These findings lend support to investment dependence theory and world society theory, and illustrate the potential environmental benefits of particular institutional factors. Further analyses suggest that industrial water pollution contributes to child and infant mortality in less-developed countries, which highlights the importance of investigating the structural determinants of industrial-based pollutants.