Are there any studies that actually prove the commonly-held belief among economists that countries with less environmental protection policy attract more foreign capital investment?



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    Yes. In many research studies (one such is cited below), a link has been established between foreign direct investment and pollution havens, or countries with less strict pollution controls. Intuitively, this makes sense: without needing to spend money on costly pollution control or clean-up processes, a firm is able to make greater profits. As a result, firms will prefer to operate/produce in these so-called pollution havens so long as the transport costs for their goods are low enough to allow them to do so.

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