We review the literature that investigates the relationship between foreign direct investment (FDI) and the environment. After reviewing the theoretical literature, we discuss two broad strands of research. First, the impact of environmental regulations on the choice of plant location and second, the impact of FDI on the emissions of various pollutants and the related question of whether we can observe environmental spillovers from foreign to domestic firms. Finally, we review the more recent literature on environmental outsourcing as an alternative to FDI and conclude with suggestions for future research.

This paper investigates various aspects of the relationship between firm productivity and importing for a large sample of Chinese firms between 2002 and 2006 making a distinction between the origin, variety, skill and technology content of imports. Employing a random effects probit model and a propensity score matching with difference -in-differences (PSM-DID) approach and treating imports as endogenous in our measure of total factor productivity (TFP) (De Loecker 2007), we test the self-selection and learning-by-doing hypotheses. Our results show evidence of a bi-directional causal rela-

We document the recent reductions in the pollution intensity of Chinese manufacturing and utilise the methods developed and applied by Levinson (2009, 2015) and Brunel (2017) to explain the underlying causes of this pollution clean-up. We find that, unlike in the US, compositional changes to the Chinese manufacturing sector have actually increased pollution emissions. This implies that the observed reductions in pollution intensities have been caused by large improvements in techniques of production driven by technology and/or regulations. The dominance of the technique effect in driving down pollution intensities is found whether we measure an 'indirect' technique effect or a direct effect using Laspeyres and Paasche indices.

Benford's Law suggests that the first digits of numerical data are heavily skewed towards low numbers. Data that fail to conform to Benford's Law when conformity is to be expected may have been manipulated. Using Benford's Law, we conduct digital frequency analysis on the emission reduction claims of Clean Development Mechanism projects. Digital frequency analysis indicates that although emission reduction claims made in project design documents do not conform to Benford's Law, we cannot reject the null hypothesis that data on certified emission reductions do. Benford's Law offers a rapid, low-cost means of identifying possible instances of data manipulation.

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