Authors: Klavens, Jonathan; Zamparutti, Anthony; OECD
Publication date: October 1995
The issue of environmental problems and their effects on foreign investment has attracted growing attention in Central and Eastern Europe. The World Bank and the OECD Centre for Co-operation with the Economies in Transition have undertaken a study to assess the importance of environmental issues to Western firms considering direct investment in the region's manufacturing, mining and construction sectors. The results should be of interest to policy-makers in Central and Eastern Europe, donors, and potential investors. This report reveals that there is a strong concern about environmental issues, and liability questions in particular, among firms considering investing in this region.. It also identifies the industries most concerned about these issues. Finally, it shows which environmental issues are of greatest importance in investment decisions. While environmental issues are seldom the most important consideration for those making investment decisions, uncertainty over liability for hazardous wastes and future emissions is almost certainly discouraging investment in some industries. This points up the need for government actions that address environmental issues in foreign direct investment and in privatization.
Publisher: World Bank