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- Title
Impact of Carbon Tax and Environmental Regulation on Inbound Cross-Border Mergers and Acquisitions Volume: An Evidence from India.
- Authors
Raghavendra, Chandrika; Rampilla, Mahesh; Thanikella, Venkata Ramana; Gupta, Isha
- Abstract
Climate change, global warming, and carbon emission are global issues. Countries are strengthening their environmental regulations to mitigate the emission problem. According to the pollution haven hypothesis, rich countries invest in emerging economies where the institutional framework is weak to migrate the emissions. With this background, this study examines the impact of the introduction of the carbon tax in India and environmental regulation restriction distance on India's inbound cross-border mergers and acquisitions (a form of foreign direct investment) volume using a 979 country-pair-year observation sample. The Tobit regression model findings suggest that carbon tax introduction and environmental regulation distance negatively impact India's inbound cross-border mergers and acquisitions volume. Furthermore, control of corruption intensifies its impact by effectively moderating them. The results indicate that India can avoid becoming a pollution haven by strengthening its environmental policies and controlling corruption. These results provide insight into strengthening the policies relating to environmental regulations and continuing the efforts required to control corruption in India.
- Subjects
INDIA; MERGERS &; acquisitions; ENVIRONMENTAL regulations; CARBON taxes; ENVIRONMENTAL impact charges; CROSS border transactions; TAX laws; FOREIGN investments
- Publication
International Journal of Financial Studies, 2022, Vol 10, Issue 4, p106
- ISSN
2227-7072
- Publication type
Article
- DOI
10.3390/ijfs10040106