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Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms

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  • Juan Bárcena-ruiz
  • María Garzón

    ()

Abstract

The purpose of this paper is tostudy how the choice of environmental standardsby governments is affected by the existence ofwage incomes when firms locations areendogenous. In developed countries labor isunionized, which allows positive wage incomesto arise. Thus, each government has incentivesto persuade firms to locate in its countrysince social welfare depends on suchincomes. But, as pollution damages theenvironment, each government will only try toattract polluting firms to thecountry, to obtain the wage incomes, whenthe valuation of environmental damage showsthat it is low. Copyright Kluwer Academic Publishers 2003

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 24 (2003)
Issue (Month): 2 (February)
Pages: 121-139

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Handle: RePEc:kap:enreec:v:24:y:2003:i:2:p:121-139

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Web page: http://www.springerlink.com/link.asp?id=100263

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Keywords: environmental standards; location; wage incomes;

References

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  1. James R. Markusen & Edward R. Morey & Nancy Olewiler, 1991. "Environmental Policy When Market Structure and Plant Locations are Endo-genous," NBER Working Papers 3671, National Bureau of Economic Research, Inc.
  2. Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-59, June.
  3. Falk Ita & Mendelsohn Robert, 1993. "The Economics of Controlling Stock Pollutants: An Efficient Strategy for Greenhouse Gases," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 76-88, July.
  4. Ulph, A. & Valentini, L., 1997. "Plant location and strategic environmental policy with inter-sectoral linkages," Resource and Energy Economics, Elsevier, vol. 19(4), pages 363-383, November.
  5. Horn, H. & Wolinsky, A., 1988. "Bilateral Monopolies And Incentives For Merger," Papers, Stockholm - International Economic Studies 410, Stockholm - International Economic Studies.
  6. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
  7. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, vol. 31(1-2), pages 79-100, August.
  8. Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 217-234, May.
  9. Markusen, James R. & Morey, Edward R. & Olewiler, Nancy, 1995. "Competition in regional environmental policies when plant locations are endogenous," Journal of Public Economics, Elsevier, vol. 56(1), pages 55-77, January.
  10. Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
  11. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer, vol. 2(2), pages 229-244, August.
  12. James R. Markusen, 1996. "Costly Pollution Abatement, Competitiveness, and Plant Location Decisions," NBER Working Papers 5490, National Bureau of Economic Research, Inc.
  13. Ulph, Alistair, 1996. "Environmental Policy and International Trade when Governments and Producers Act Strategically," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 265-281, May.
  14. Rauscher, Michael, 1994. "Environmental Regulation and the Location of Polluting Industries," CEPR Discussion Papers 1032, C.E.P.R. Discussion Papers.
  15. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  16. Hettige, Hemamala & Lucas, Robert E B & Wheeler, David, 1992. "The Toxic Intensity of Industrial Production: Global Patterns, Trends, and Trade Policy," American Economic Review, American Economic Association, vol. 82(2), pages 478-81, May.
  17. Portney, Paul R, 1990. "Economics and the Clean Air Act," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 173-81, Fall.
  18. Golombek, Rolf & Raknerud, Arvid, 1997. " Do Environmental Standards Harm Manufacturing Employment?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 29-44, March.
  19. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier, Elsevier.
  20. Bughin, Jacques & Vannini, Stefano, 1995. "Strategic direct investment under unionized oligopoly," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 13(1), pages 127-145, March.
  21. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July.
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Citations

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Cited by:
  1. Brcena-Ruiz, Juan Carlos & Garzn, Mara Begoa, 2009. "Relocation and public ownership of firms," Journal of the Japanese and International Economies, Elsevier, vol. 23(1), pages 71-85, March.
  2. Juan Bárcena-Ruiz & María Garzón, 2014. "Relocation and investment in R&D by firms," Portuguese Economic Journal, Springer, vol. 13(1), pages 25-38, April.
  3. Bárcena Ruiz, Juan Carlos & Campo Corredera, María Luz, 2011. "Partial cross-ownership and strategic environmental policy," IKERLANAK 2011-47, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  4. Lin-Ti Tan, 2005. "Spatial Economic Theory of Pollution Control under Stochastic Emissions," IEAS Working Paper : academic research 05-A009, Institute of Economics, Academia Sinica, Taipei, Taiwan.
  5. Luciano Fanti, 2012. "Environmental standards and Cournot duopoly: a stability analysis," Discussion Papers 2012/154, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  6. Juan Bárcena-Ruiz & María Garzón, 2006. "Mixed Oligopoly and Environmental Policy," Spanish Economic Review, Springer, Springer, vol. 8(2), pages 139-160, June.
  7. Juan Carlos Bárcena-Ruiz, 2011. "Production externality and productivity of labor," Hacienda Pública Española, IEF, IEF, vol. 196(1), pages 65-78, january.

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