This paper attempts to examine the role of environmental governance on foreign direct investment by testing the pollution haven hypothesis for 21 Indian states for the period 2002–2010. To test for the hypothesis, this study computes an abatement expenditure index adjusted for industrial...

EG index, the most widely adopted agglomeration index has two major limitations. First the index does not yield a statistical significance value and hence prone to Type-I and Type-II errors. The paper uses the method proposed by Cassey and Smith (2014) to overcome this limitation. Second, the...