Figure 2
A line graph illustrates the percentage effect of the environmental clause on expected foreign direct investment (FDI) as a function of host-country governance, measured in z-scores. The x-axis represents host-country governance z-scores ranging from -2 to 2, while the y-axis shows the percentage effect of the clause on expected FDI, ranging from -100 to 200. The data points are marked with circles and connected by a line, with error bars indicating the variability or uncertainty of the measurements at each governance level. The graph shows a positive trend, indicating that as host-country governance improves (higher z-scores), the positive effect of the environmental clause on expected FDI increases. Conversely, poorer governance (lower z-scores) is associated with a lesser or even negative effect. The error bars are wider at the extremes of the governance spectrum, suggesting greater uncertainty in the measurements at these levels. All values are approximated.Marginal effect of environmental clause across governance levels