FDI in Space: Spatial Autoregressive Relationships in Foreign Direct Investment

Theoretical models of foreign direct investment (FDI) have only recently begun to model the role of third countries, and the empirical FDI literature has almost exclusively examined bilateral FDI data without recognizing the potential interdependence between FDI decisions to alternative host countries. This paper uses spatial econometric techniques to examine the spatial correlation between FDI to alternative (neighboring) regions. The sign of such correlations can provide evidence for or against alternative theories for FDI motivations. Using data on OECD countries from 1980-2000, we find evidence consistent with export platform FDI in Europe.

Social and Ecological Determinants of Land Clearing in the Brazilian Amazon: A Spatial Analysis

Abstract While tropical land clearing in the Brazilian Amazon provides for the livelihoods of Brazilians from a variety of socio-economic backgrounds, it also contributes to changes in climatological and ecological processes at a variety of scales. To develop sustainable approaches that balance the needs of forest users with ecological requirements, further study is needed to investigate the root causes of tropical land clearing. This study uses novel and systematic spatial econometric techniques to estimate the effects of ecosystem productivity, as measured by soil fertility and climate, and strategic interactions on municipal-level land clearing in the Legal Amazon of Brazil between 1970 and 1995. We find a negative relationship between soil fertility and land clearing. Furthermore, there is evidence of positive spatial interactions across municipalities in most specifications

Cooperation in Environmental Policy: A Spatial Approach

45 p.Inefficient competition in emissions taxes creates benefits from international cooperation. In the presence of cross-border pollution, proximate (neighboring) countries may have greater incentives to cooperate than distant ones as illustrated by a model of tax competition for mobile capital. Spatial econometrics is used to estimate participation in 37 international environmental treaties. Data on 41 countries from 1980-1999 reveal evidence of increased cooperation among proximate countries. Furthermore, the results indicate that FDI usually increases treaty participation. We also find that both OECD and non-OECD countries respond positively to OECD countries’ participation but the response to non-OECD countries is primarily from similar countries. This suggests that the rich countries may lead others in setting environmental quality