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Do Stringent Environmental Regulations Reduce International Competitiveness? Evidence from an Inter-industry A nalysis

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  • Ravi Ratnayake
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    Abstract

    An increasing interest has emerged among policy makers and academics on the question "Do stringent environmental regulations lead to loss of international competitiveness in terms of declining exports and increasing imports compared with those from the countries which have lower environmental standards and regulations?". This paper examines this issue by conducting an inter-industry analysis of New Zealand manufacturing industries. By analysing the patterns and determinants of comparative advantage of 109 industries over the last 13 years, we found no strong evidence to suggest that environmental standards lead to loss of competitiveness.

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    File URL: http://www.tandfonline.com/10.1080/13571519884585
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.

    Volume (Year): 5 (1998)
    Issue (Month): 1 ()
    Pages: 77-96

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    Handle: RePEc:taf:ijecbs:v:5:y:1998:i:1:p:77-96

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    Web page: http://www.tandfonline.com/CIJB20

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    Related research

    Keywords: Environmental Regulations; International Competitiveness; Exports And Imports; Inter-industry Analysis;

    References

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    1. Siebert, Horst, 1985. "Spatial aspects of environmental economics," Handbook of Natural Resource and Energy Economics, in: A. V. Kneeseā€  & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 3, pages 125-164 Elsevier.
    2. Revesz, Richard L. & Stavins, Robert N., 2007. "Environmental Law," Handbook of Law and Economics, Elsevier.
    3. Ballance, Robert H & Forstner, Helmut & Murray, Tracy, 1987. "Consistency Tests of Alternative Measures of Comparative Advantage," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 157-61, February.
    4. Leamer, Edward E, 1980. "The Leontief Paradox, Reconsidered," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 495-503, June.
    5. 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.
    6. Copeland Brian R., 1994. "International Trade and the Environment: Policy Reform in a Polluted Small Open Economy," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 44-65, January.
    7. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    8. Travis, William P, 1972. "Production, Trade, and Protection When There are Many Commodities and Two Factors," American Economic Review, American Economic Association, vol. 62(1), pages 87-106, March.
    9. Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
    10. Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November.
    11. Sorsa, Piritta & DEC, 1994. "Competitiveness and environmental standards : some exploratory results," Policy Research Working Paper Series 1249, The World Bank.
    12. McGuire, Martin C., 1982. "Regulation, factor rewards, and international trade," Journal of Public Economics, Elsevier, vol. 17(3), pages 335-354, April.
    13. Lopez, Ramon E. & Islam, Asif M., 2008. "Trade and the Environment," Working Papers 45982, University of Maryland, Department of Agricultural and Resource Economics.
    14. Dean, Judith M., 1992. "Trade and the environment : a survey of the literature," Policy Research Working Paper Series 966, The World Bank.
    15. Magat, Wesley A., 1978. "Pollution control and technological advance: A dynamic model of the firm," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 1-25, March.
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    Cited by:
    1. Claustre Bajona & David L. Kelly, 2005. "Trade and the Environment with Pre-existing Subsidies: A Dynamic General Equilibrium Analysis," Working Papers 0603, University of Miami, Department of Economics, revised 01 Mar 2006.

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