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Corruption, environmental regulation and market entry

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  • Biswas, Amit K.
  • Thum, Marcel

Abstract

The authors develop a simple analytical framework to study the welfare-maximizing environmental standards when market entry is endogenous and firms can circumvent regulation by bribing corrupt officials. Corruption changes the tradeoff in environmental policy. Corruption leads more polluting firms to enter into the market, which requires tighter environmental regulation. However, corruption also makes trading in some environmental protection for a marginally higher market entry optimal for the government.

Suggested Citation

  • Biswas, Amit K. & Thum, Marcel, 2017. "Corruption, environmental regulation and market entry," Environment and Development Economics, Cambridge University Press, vol. 22(1), pages 66-83, February.
    • Handle: RePEc:cup:endeec:v:22:y:2017:i:01:p:66-83_00
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    Cited by:

    1. Saibal KAR & Biswajit MANDAL & Sugata MARJIT & Vivekananda MUKHERJEE, 2020. "Seeking Rent In The Informal Sector," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(1), pages 151-164, March.
    2. Yanlei Zhang, 2021. "Greasing Dirty Machines: Evidence of Pollution-Driven Bribery in China," Journal of Business Ethics, Springer, vol. 170(1), pages 53-74, April.
    3. Albert Persaud & Geraint Day & Susham Gupta & Antonio Ventriglio & Roxanna Ruiz & Egor Chumakov & Geetha Desai & Joao Castaldelli-Maia & Julio Torales & Edgardo Juan Tolentino & Kamaldeep Bhui & Dines, 2018. "Geopolitical factors and mental health I," International Journal of Social Psychiatry, , vol. 64(8), pages 778-785, December.
    4. Adeleke, Olaitan & McSharry, Patrick E., 2022. "Female enrollment, child mortality and corruption are good predictors of a country’s UN Education Index," International Journal of Educational Development, Elsevier, vol. 90(C).
    5. Fu, Tong & Jian, Ze, 2021. "Corruption pays off: How environmental regulations promote corporate innovation in a developing country," Ecological Economics, Elsevier, vol. 183(C).
    6. Hamaguchi, Yoshihiro, 2023. "Environmental tax evasion as a determinant of the Porter and pollution haven hypotheses in a corrupt political system," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 610-633.

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