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Do Dirty Industries Conduct Offshore Assembly In Developing Countries?

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Author Info
Don P. Clark
SERAFINO MARCHESE
SIMONETTA ZARRILLI
Abstract

This paper investigates whether the cost of environmental regulation influences the international location of polluting industries. Industries that operate production facilities in developing countries are identified through their use of the offshore assembly provisions in the U.S. tariff code. Pollution intensity of industry output is found to significantly reduce the probability of conducting offshore assembly in developing countries. This finding contradicts the argument that developing countries are becoming pollution havens as a result of offshore assembly independent of their general disregard for the environment. Integrating production across national boundaries might actually enhance worldwide environmental quality. Relatively clean stages of the production process are being transferred to developing countries with lax environmental regulations, while polluting segments remain in the U.S. where strict environmental controls are enforced. [F1, Q2]

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Article provided by Korean International Economic Association in its journal International Economic Journal.

Volume (Year): 14 (2000)
Issue (Month): 3 (October)
Pages: 75-86
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Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:75-86

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Helleiner, Gerald K, 1973. "Manufactured Exports from Less-Developed Countries and Multinational Firms," Economic Journal, Royal Economic Society, vol. 83(329), pages 21-47, March. [Downloadable!] (restricted)
  2. Pethig, Rudiger, 1976. "Pollution, welfare, and environmental policy in the theory of Comparative Advantage," Journal of Environmental Economics and Management, Elsevier, vol. 2(3), pages 160-169, February. [Downloadable!] (restricted)
  3. Michael Ferrantino & Linda Linkins, 1999. "The effect of global trade liberalization on toxic emissions in industry," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(1), pages 128-155, March. [Downloadable!] (restricted)
  4. Tobey, James A, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Blackwell Publishing, vol. 43(2), pages 191-209.
  5. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March. [Downloadable!] (restricted)
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  1. Don Clark, 2006. "Country and industry-level determinants of vertical specialization-based trade," International Economic Journal, Korean International Economic Association, vol. 20(2), pages 211-225, June. [Downloadable!] (restricted)
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