Jobs first, environment second: the conditional effect of pollution on perceptions of Foreign Direct Investment

The growing literature on public opinion toward foreign direct investment (FDI) focuses primarily on the FDI-related job prospects of individuals. However, different types of FDI have varying economic and environmental impacts; we argue that individuals consider the trade-offs between these effects when forming attitudes about FDI. Utilizing a province-level dataset of recent FDI projects (categorized by their level of pollution and job creation) matched with public opinion data in seven Latin American countries, we find that exposure to investment that creates larger numbers of jobs improves attitudes toward FDI, regardless of environmental impact. However, environmental impact is a significant component of how some individuals form perspectives about FDI: respondents that prioritize the environment have more positive attitudes toward FDI when they are exposed to a higher share of FDI with relatively less environmental impact. Among all respondents, exposure to more economically beneficial FDI has a stronger positive impact when a higher percentage of the FDI is in lower-polluting industries.