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Are ASEAN Countries Havens for Japanese Pollution-Intensive Industry?

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  • Robert J. R. Elliott
  • Kenichi Shimamoto

Abstract

In an era of closer worldwide economic integration, the role that environmental regulations play in shaping a country's comparative advantage is greater than ever. This has led to fears that 'dirty' firms will relocate from developed to developing countries where environmental regulations may be less stringent - the so-called pollution haven hypothesis. To date, however, there is little support for the existence of pollution havens despite anecdotal evidence and the theoretical predictions. In this paper we employ a unique industry-level dataset for Japan and examine whether Japanese industries have relocated production to their ASEAN neighbours in response to the relative stringency of Japanese environmental regulations. Not only do we find no evidence for pollution-haven-consistent behaviour but also some indication that the complex relationship between the characteristics of Japanese dirty industries and environmental regulations may actually have reduced Japanese outward FDI to the Philippines. Copyright 2008 The Authors.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 31 (2008)
Issue (Month): 2 (02)
Pages: 236-254

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Handle: RePEc:bla:worlde:v:31:y:2008:i:2:p:236-254

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Cited by:
  1. Ulrich J. Wagner & Christopher Timmins, 2010. "Agglomeration Effects in Foreign Direct Investment and the Pollution Haven Hypothesis," Working Papers, Duke University, Department of Economics 10-05, Duke University, Department of Economics.
  2. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, Elsevier, vol. 24(C), pages 445-453.
  3. Al-mulali, Usama & Foon Tang, Chor, 2013. "Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries," Energy Policy, Elsevier, Elsevier, vol. 60(C), pages 813-819.
  4. José-Antonio Monteiro & Madina Kukenova, 2008. "Does Lax Environmental Regulation Attract FDI When Accounting For "Third-Country" Effects?," IRENE Working Papers, IRENE Institute of Economic Research 08-01, IRENE Institute of Economic Research.
  5. Rezza, Alief A., 2013. "FDI and pollution havens: Evidence from the Norwegian manufacturing sector," Ecological Economics, Elsevier, Elsevier, vol. 90(C), pages 140-149.
  6. Yang Lu, 2010. "Do environmental regulations influence the competitiveness of pollution-intensive products?," Frontiers of Economics in China, Springer, Springer, vol. 5(2), pages 276-298, June.

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