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KAIST Study Finds Politically Salient Immigration Issues Can Lead to Higher Industrial Pollution
When immigration or refugee issues become heated political topics, nearby factories may end up releasing more toxic substances. Although the two phenomena may appear unrelated, a KAIST-led international research team has found that they are in fact connected through the government’s limited administrative and fiscal resources.
KAIST (President Choongsik Bae) announced on the 10th of July that a joint research team led by Professor Narae Lee from The School of Business and Technology Management at KAIST, in collaboration with Professor Heli Wang from Singapore Management University (SMU), analyzed immigration-related legislation and environmental data across the United States and found that when immigration becomes a central political agenda, government environmental oversight weakens and firms’ toxic chemical releases increase. The research team describes this phenomenon as “institutional crowding.”
Government administrative capacity and budgets are not unlimited. When a new political issue emerges, government attention and resources become concentrated in that area. In the process, enforcement in relatively less visible policy areas, such as environmental oversight, may weaken. Although the research team analyzed immigration as a case study, they explain that this phenomenon is not limited to a specific issue. Rather, it represents a general mechanism that can arise when political agendas compete for limited government resources.
The research team combined data from the U.S. Environmental Protection Agency’s Toxics Release Inventory (TRI) with immigration-related legislative data from U.S. states. By analyzing a total of 82,377 observations collected from 14,390 manufacturing facilities across the United States between 2010 and 2018, the team found that each additional immigration-related bill was associated with an average increase of about 1% in toxic chemical releases per manufacturing facility. This is equivalent to approximately 25 kilograms, or 56 pounds, of additional toxic emissions per facility.
The researchers found that this increase was not caused by a relaxation of environmental regulatory standards. Rather, it occurred because firms reduced costly efforts to cut pollution and treat toxic waste as government environmental oversight became relatively less effective.
This pattern was especially pronounced in states facing fiscal constraints. In states with high debt or heavy fiscal burdens, environmental oversight weakened further when political attention shifted to new issues.This suggests that when government budgets are tight, resources are more likely to be allocated first to politically urgent issues, while environmental monitoring may be pushed down the priority list.
Professor Narae Lee said, “This study does not argue that immigration causes environmental pollution. Rather, it shows that shifts in the political agenda item can weaken environmental oversight and thereby increase corporate pollution,” adding, “Even when limited government resources are concentrated on a particular issue, environmental oversight needs to be institutionally protected so that it remains stable.”
The study is significant in that it empirically identifies how competition among political agendas can affect firms’ environmental pollution management. It also offers new implications for public policy and for advancing environmental justice, so that the burden of environmental pollution does not fall disproportionately on socially vulnerable groups.
The research was published online on May 29 in the Journal of Management, a leading international journal in the field of management, with Professor Narae Lee as the first author.
An earlier version of the paper received the POSCO Corporate Citizenship Research Award, the Robert J. Litschert Award from the Academy of Management, and the Best Paper with Practical Implications Award from the Strategic Management Society, recognizing the excellence and practical significance of the research.
※ Paper title: There’s More Than Meets the Eye: Assessing the Impact of Immigrants on Firm Environmental Performance, DOI: https://doi.org/10.1177/01492063261442451
2026.07.10 View 1355 -
The Stricter a Country’s Environmental Regulations, the Better Electric Cars Sell
<(From Left) Professor Narae Lee, Professor Heather Berry, Professor Jasmina Chauvin, Porfessor Yuxi Lance Cheng>
A joint international research team has challenged the traditional 'pollution haven' hypothesis—which suggests that companies relocate production to countries with lax environmental regulations—by proposing a new strategy that companies should seek a 'green haven' instead. This finding is attracting attention.
KAIST (President Kwang Hyung Lee) announced on the 17th of October that the research team led by Professor Narae Lee of the KAIST College of Business, through an international joint study with Professors Heather Berry and Jasmina Chauvin of Georgetown University in the U.S., and Professor Lance Cheng of the University of Texas, revealed that 'green products, such as electric vehicles, are more competitive when menufactured in countries with strict environmental regulations.'
'Green products' are eco-friendly products that cause less environmental pollution, including energy-efficient home appliances that consume less electricity, and eco-friendly vehicles (electric cars, hybrid cars) that reduce pollution.
For a long time, the dominant explanation was that multinational corporations primarily concentrated production and export in countries with weak environmental regulations. However, with the recent strengthening of climate change response and ESG (Environmental, Social, and Governance) management, the global trade of green products is rapidly expanding. This has led to new patterns that are difficult to explain with existing theories alone.
The joint research team precisely verified trade patterns by analyzing data from 'UN Comtrade,' the global trade database operated by the UN, covering 92 importing countries, 70 exporting countries, and approximately 5,000 products from 2002 to 2019.
<Figure1. Changes in National EPI Index and Export Volume According to Product Characteristics>
The result confirmed a typical pollution haven effect: the overall trade volume decreased when environmental regulations were strengthened. However, for green products only, trade was found to increase. In other words, the stricter the environmental regulations, the more active the export and sourcing of green products became.
<Figure2. Changes in Global Sourcing According to Product Characteristics>
This shows that companies are not simply moving to regions with loose regulations to save on production costs. Instead, they prefer countries with strong regulations to secure transparency and legitimacy in the production and transaction process of eco-friendly products.
This effect was particularly prominent in the final consumer goods sector, which directly interacts with consumers—i.e., smartphones, clothing, food, cosmetics, home appliances, and automobiles that we use daily—and the tendency was even stronger for products exported to countries with active environmental movements or NGO activities.
Professor Lee emphasized, "This study shows that global supply chains can no longer be explained solely by cost efficiency, and that a company's environmental legitimacy determines its strategic choices." She added, "Strong environmental policies do not restrict corporate activities; they can become the foundation for enhancing the competitiveness of green products."
The research findings were published on September 1st in the Journal of International Business Studies (JIBS), the top academic journal in the field of international business.
Paper Title: The global sourcing of green products. https://doi.org/10.1057/s41267-025-00801-2
This research was made available for free viewing through KAIST's Open Access publication support, and it is expected that the research results will be utilized in academia and policy-making.
2025.10.17 View 3763