Saussay, Aurelien ORCID: 0000-0003-4786-0019 and Sato, Misato
ORCID: 0000-0002-9978-9595
(2024)
The impact of energy prices on industrial investment location: evidence from global firm level data.
Journal of Environmental Economics and Management, 127.
ISSN 0095-0696
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Abstract
This study examines the influence of relative energy prices on the geographical distribution of industrial investments across 41 countries. Employing a gravity model framework to analyse firms’ investment location decisions, we estimate the model using global bilateral investment flows derived from firm-level M&A data. Our findings reveal that a 10% increase in the energy price differential between two countries results in a 3.2% rise in cross-border acquisitions. This effect is most pronounced in energy-intensive industries and transactions targeting emerging economies. Furthermore, policy simulations suggest that the impact of unilateral carbon pricing on cross-border investments is modest.
Item Type: | Article |
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Official URL: | https://www.sciencedirect.com/journal/journal-of-e... |
Additional Information: | © 2024 The Authors |
Divisions: | Grantham Research Institute |
Subjects: | G Geography. Anthropology. Recreation > GE Environmental Sciences H Social Sciences > HB Economic Theory |
JEL classification: | F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Costs; Distributional Effects; Employment Effects |
Date Deposited: | 13 May 2024 11:48 |
Last Modified: | 16 Aug 2024 19:15 |
URI: | http://eprints.lse.ac.uk/id/eprint/123034 |
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