Is India a pollution haven? Evidence from cross-border mergers and acquisitions

Impact of Carbon Tax and Environmental Regulation on Inbound Cross-Border Mergers and Acquisitions Volume: An Evidence from India

“…There is evidence to confirm environmental factors affecting the CBM&A activities (Bose et al 2021;Liu et al 2021;Raghavendra et al 2022). The Pollution Haven Hypothesis (PHH) states that developed economies will invest in EE to reduce their home country emissions and offshore them.…”

“…In addition to various country-level factors mentioned above, environmental factors, including CO 2 emissions, play a vital role in CBM&A flows (Bose et al 2021;Liu et al 2021;Raghavendra et al 2022). The Pollution Haven Hypothesis (PHH) argues that rich countries, to reduce their CO 2 emission, have been investing in EE where the institution is weak.…”

“…Therefore, CO 2 emissions play a vital role in CBM&A activities; hence, exploring whether the home country's CO 2 emissions influence the firms to undertake such activities in EE is fascinating. (Raghavendra et al 2022) shows whether there are any symptoms of India being a pollution haven for MNEs entering through CBA activities and provides evidence that the home country's CO 2 emission is inversely related to India's inbound CBA volume. The government of India is very cautious and has been introducing various environmental protection policies and programs and strengthening its regulations.…”

“…However, with experience, they develop strategies to deal with it and create value through CBM&A activities (Barbopoulos et al 2012). (Raghavendra et al 2022) shows corruption control has benefited India from becoming a pollution haven from CBM&A activities. With the growing CBM&A activities and greater efforts to control corruption in India, we believe MNEs have gained experience and use corruption control measures to their advantage in the CBM&A activities.…”

“…and (3) Does India's corruption control, representing the formal institutional framework's quality, have a moderating role to play? Home countries' MNEs must have been migrating to India to mitigate their carbon risk (Raghavendra et al 2022). It is also seconded and supported by the fact that India has emerged as one of the top-emitting countries in the world during the last decades (Olivier and Peters 2020.…”