Environmental regulation and revealed comparative advantages in Europe: is China a pollution haven?
AbstractThe relocation of more polluting industries in poorer countries due to gaps in environmental standards is known as the pollution haven effect, whereby the scale and the composition of output change across countries. Changes in the composition of the output mix might translate into changes of comparative advantages across countries, as revealed by trade flows. This paper focus on this issue and looks at the changes of bilateral revealed comparative advantages (RCAs) in the last decade between China and the major fourteen EU countries (EU14). Using industry level data on bilateral trade, air pollution, water pollution and several measures of environmental stringency, we find that, controlling for other factors that may have affected RCAs, such as labor costs, on average our EU14 countries have kept or improved their advantages with respect to China in both water polluting industries (such as paper and agro-based industries) and air polluting industries (such as basic metals and chemicals), while they have lost competitiveness in the more clean industries (such as machinery and fabricated metals).
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Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Questioni di Economia e Finanza (Occasional Papers) with number 67.
Date of creation: Jun 2010
Date of revision:
revealed comparative advantages; environmental regulation; industrial pollution;
Other versions of this item:
- Daniela Marconi, 2012. "Environmental Regulation and Revealed Comparative Advantages in Europe: Is China a Pollution Haven?," Review of International Economics, Wiley Blackwell, vol. 20(3), pages 616-635, 08.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F18 - International Economics - - Trade - - - Trade and Environment
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-03 (All new papers)
- NEP-ENV-2010-07-03 (Environmental Economics)
- NEP-EUR-2010-07-03 (Microeconomic European Issues)
- NEP-REG-2010-07-03 (Regulation)
- NEP-TRA-2010-07-03 (Transition Economics)
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.:
- Carl Pasurka, 2008. "Perspectives on Pollution Abatement and Competitiveness: Theory, Data, and Analyses," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 194-218, Summer.
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