Journal of Security and Sustainability Issues

Do foreign controlled firms exhibit a different environmental performance from domestically controlled ones for ‘developed countries’? The aim of this paper is to examine whether foreign firms are more environmentally sustainable than their domestic counterparts, i.e., the Pollution Halo Hypothesis generally analysed in developing countries. By using firm-level panel data over the time period 2002-2006, this study explores the differences in environmental performance -measured by air and water pollution emissions—of Italian dirty-firms with different types of ownership: Foreign multinational enterprises (FMNEs), National multinational enterprises (NMNEs) and Domestic enterprises (DOMESTICs). Econometric results show that foreign ownership does not influence air and water pollution emissions, suggesting the lack of evidence of a Pollution Halo Hypothesis in developed countries.