Strategic Environmental Policies in the Presence of Foreign Direct Investment
AbstractWe analyze strategic environmental standards in the presence of foreign direct investment. A number of foreign firms located in a host country compete with a domestic firm in another country to export a homogeneous good to a third country. When the number of foreign firms is exogenous, the host country applies a stricter environmental regulation than the other producing country. However, under free entry and exit of foreign firms, the host country may apply a less severe standard under both non-cooperative and cooperative equilibrium. We also find that the nature market structure does not affect the equilibrium values of total pollution if export subsidies are also used. Copyright Springer 2005
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 30 (2005)
Issue (Month): 1 (January)
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Web page: http://www.springerlink.com/link.asp?id=100263
environment; emission permits; foreign direct investment; trade; pollution;
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